Under Goods and Services Tax Law, specific provisions have been laid down to levy penalty and interest in case of short-payment or delayed payment or non-payment of GST be it bonafide or in case of fraud, suppression, mis-statement etc.
There are some important points pertaining to demand and recovery under GST:
1. If a person chargeable with tax, pays the amount along with interest before issue of show cause notice under section 73. Section 73 deals with the cases where there is no invocation of fraud or suppression or mis-statement etc. Section 74 deals with cases where the provisions related to fraud or suppression or mis-statement etc. are invoked. In such cases notice shall not be issued by the proper officer.
2. If show cause notice is issued under Section 73 and thereafter the noticee makes payment along with interest within 30 days of issue of notice, no penalty shall be payable and all proceedings in respect of such notice shall be deemed to be concluded.
3. In case of section 73 cases other than fraud or suppression of facts or wilful misstatement, the relevant date shall be counted from the due date for filing of annual return for the financial year to which demand relates to.
4. The Show Cause Notice has to be adjudicated within a period of three years from the due date of filing of annual return. The Show Cause Notice is required to be issued at least three months prior to the time limit set for adjudication.
5. In case of section 74 cases involving fraud or suppression of facts or wilful misstatement, the relevant date shall be counted from the due date for filing of annual return for the financial year to which demand relates to. The Show Cause Notice has to be adjudicated within at period of five years from the due date of filing of annual return. The Show Cause Notice is required to be issued at least six months prior to the time limit set for adjudication.
6. In case of section 73 cases other than fraud or suppression of facts or wilful mis-statement, the time limit for adjudication of cases is 3 years from the due date for filing of annual return for the financial year to which demand relates to.
7. In case of section 74 cases of fraud or suppression of facts or wilful misstatement, the time limit for adjudication is 5 years from the due date for filing of annual return for the financial year to which demand relates to.
8. There is immunity to a person chargeable with tax in cases of fraud/suppression of facts or wilful misstatement, who pays the amount of demand along-with interest before issue of notice
9. Person chargeable with tax, shall have an option to pay the amount of tax along with interest and penalty equal to 15% percent of the tax involved, as ascertained either on his own or ascertained by the proper officer, and on such payment, no notice shall be issued with respect to the tax so paid.
10. Where the person to whom a notice has been issued under sub-section (1) of section 74, pays the tax along with interest with penalty equal to 25% of such tax within 30 days of issue of notice, all proceedings in respect of such notice shall be deemed to be concluded.
11. In case a notice is adjudicated under Section 74 and order issued confirming tax demand and penalty, the noticee have any option to pay reduced penalty if any person pays the tax determined by the order along with interest and a penalty equivalent to 50% of such tax within thirty days of the communication of order, all proceedings in respect of the said tax shall be deemed to be concluded.
12. It is mandatory to pay amount, collected from other person representing tax under this act, to the government. For any such amount not so paid, proper officer may issue SCN for recovery of such amount and penalty equivalent to such amount.
13. The proper officer may recover the dues in following manner:
i. Deduction of dues from the amount owned by the tax authorities payable to such person.
ii. Recovery by way of detaining and selling any goods belonging to such person;
iii. Recovery 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 credit of the Central or a State Government;
iv. Detrain any movable or immovable property belonging to such person, until the amount payable is paid. If the dues not paid within 30days, the said property is to be sold and with the proceeds of such sale the amount payable and cost of sale shall be recovered.
v. Through the Collector of the district in which such person owns any property or resides or carries on his business, as if it was an arrear of and revenue.
vi. 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.
(g) Through enforcing the bond /instrument executed under this Act or any rules or regulations made there under.
vii. CGST arrears can be recovered as an arrear of SGST and vice-versa.
On receipt of any such request, Commissioner/Chief Commissioner may extend the time for payment or allow payment of any amount due under the Act, other than the amount due as per the liability self-assessed in any return, by such person in monthly instalments not exceeding twenty four, subject to payment of interest under section 50 with such limitations and conditions as may be prescribed. However, where there is default in payment of any one instalment on its due date, the whole outstanding balance payable on such date shall become payable and recovered without any further notice.
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