DEMAND & RECOVERY

Proceeding in case where

| Non-Payment of Tax Short Payment of Tax Erroneous Refund Wrong - availment or utilisation of ITC | F 7 Excess collection of Tax

Ks PY a y Cases other than fraud, wilful misstatement Cases by reason of fraud wilful misstatement
AY-Yeau/-4 Tax collected but not paid to Government
or suppression of facts (Bonafide intension) or suppression of facts(malafide intension)
or

73(5) | 730) J wm © 74())

| | 4 7468) ) Tax collected from any person to be paid to the CG:- Every
person collected tax and has not paid it to Govt.= shall
v v Voluntary Payment Before SCN immediately pay the said amount to Govt.. (Irrespective of
Voluntary Payment before SCN Issue of SCN Issue of SCN
whether relevant supplies are taxable or not).
Time for SCN . ; Time for SCN
Pay = Tax + Interest 3 Months before | Specify the Specify the| ¢ months before Pay = Tax + Interest + IS% Penalty of Tax Issue of SCN:- If above amount 76(I) has not been paid,
(Ascertained by tax raver or PO) last date of D.O. | Amt. of Tax + Tax +| last date of D.O. (Ascertained by tax payer or PO) PO = may serve a SCN = on the person liable to pay such
amount Tax & Penalty,
J | (i.e. 2 yrs. & | Interest + Interest +| Cie. 4 yrs. & t 1
Note- There is no time limit for Serving SCN under this
4 months from 6 months from section
Full Payment Short Payment pip of A.R) Penalty 100% Penalty D/> of AR) Short Payment Full Payment
| Inform to P.O. Demand Order:- After considering representation,
Inform to P.O. |
the PO = determine the amount due from such person ,
SCN Shall not*bejissued SCN Shall not be issued & thereupon, such person shall pay the amount so
determined.
Interest Payment:- Person= pay interest @
Payment of Tax + Interest Payment of Tax + Interest I3%/24%PA Euls $0F, from the date of collection - to
as mentioned in SCN as mentioned in SCN the date of payment to Govt.
Opportunity of being heard:- Opportunity =granted
v v v (where request in written, received from such person)
If Payment is If Payment is not made within If Payment is not If Payment is paid
paid within 30 days of SCN within 30 ‘tT of SCN Time limit for Issuance of Order:- Within one year- from
Made within 30 days of 30 days & representation is
the date of issue of SCN. ENo time limit for issue of SCNF

|
given in his defense

[|
SCN
Amt. Tax + Interest + penalty Period of stay excluded:- Where issuance of order-
All proceeding will be Payable = equal to 25% of tax stayed by an order of the Court/Appellate Tribunal
stay period-excluded from period of| Year.
concluded
All proceeding shall
Order must be a speaking order:- PO = set out relevant
be concluded
facts & the basis of his decision.
Liability to pay_ Tax + Interest + Penalty Period - within 3 yrs. Period-within S yrs. Liability to pay Tax + Interest
tax as D.O. 10% of tax or %10,000 Wit from the due date of from the due date of tax as D.O. + 100% Penalty Adjustment of amount payable u/s 76(1) & (3):- Amount
Annual Return Annual Return paid to Govt. (Sub-sec.I/3)=adjusted against tax
v payable by person, i.r.t. supplies Csub-sec.I)
Penalty is payable irrespective of the fact that whether Amt. of tax If payment is not made If payment is 10 Surplus after adjustment:- Amount of surplus Cafter adj.
& Interest is paid within 30 days or not from the date of within 30 “ye of Serving D.O. within 30 days serving D.0. above)= “Credited to the Welfare Fund, Cor) “Refunded
Communication of order
Amt. payable = Tax + Interest Amt. payable = Tax + Interest to the person, borne the incidence of such amount.
+ 100% of tax Penalty + S0% of tax Penalty
Nn Refund :- Person- borne incidence of the amount= may
Important Notes :- apply for refundf£uls $43.
i) all proceedings in respect of the said notice” shall not include proceedings under section 132
ii) proceedings against the main person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under sections 122, 12S, 129 and 130 are deemed to be concluded.
Gii) For the purposes of this Act, the expression “suppression” shall mean
> non-declaration of facts or information which a taxable person is required to declare in the return, statement, report or any other document furnished under this Act or the rules made thereunder, or
2failure to furnish any information on being asked for, in writing, by the proper officer.

Sec 73(I) :- Where amount of self -assessed tax is not paid within 30 days from the due date of payment of tax
then mandatory penalty = 10% of tax or = 10,000 Wik
AY-Ya AQ §=Determination of Tax (General prov.)
Short Payment or non-payment of self assess tax within due date ! Period of stay- If issueance of SCN/DO is stayed by Court/AT= excluded from period of SCN/DO for
fraud/other than fraud.
y 2 | IFAA/AT concludes that charges of fraud are not sustainable- SCN u/s 74(I)= SCN uls 73).
Tax is self assessed(in GSTR-1) but not paid Tax is not self assessed & also not paid within 3 | Order on direction of Court= such order shall be issued within 2 yr from the date of communication of direction.
within 30 days of due date 30 days of due date (not declare in GSTR-I)
| ¥ 4 | Opprtunity of being heard to aggreived person.
See 73 : cases other than fraud S | Adjornment(for reasons in written) =Upto 3times to a person
GSTR-3B is filed (with payment If proceeding U/s 73 is invoked {
of tax or intrest) after 30 days before furnishing GSTR-3B & v 6 |Order=Speaking (set out relevant facts & basis for his decisions)
of due date but before issue of SCN payment of tax + interest Sec 73(6) Sec 73(8) 7 | Amount to be paid(D/0)=<Amount to be paid(SCN)
¥ + Voluntary payment Payment of 8 | IFAA/AT/court modifies amount of tax- modify Interest/penalty accordingly.
Sec 73(N) is not applicable Sec 73(1) is applicable i.e.
fee. no penalty is payable penalty (10% of tax or = 10,000 (Tax + Intrest) (Tax + Interest) 9 |Interest= mandatory (even if not specified in SCN)
A
as proceeding u/s 73Y is not peg
invoked WIH) is payable mandatorily before SCN
30 deus ne Sen 10 | no DO is issued withing 3 years (other than fraud)
or S years (in case
of fraud) then proceeding deemed
to be concluded
Note- Circular No. - 76/N'S/2013 as proceeding u/s 73 is invoked ¥ y | 1F appeal filed by dept.,against decision of AT/AA/court= Period bw date of decision of higher authority &
Note - Benefit of Sec 73(6) & 73(3) allowed & No
allowed & no lower authority= excluded from period of SCN/DO
is not available as 73(Il) override penalty
penalty 12 | lf any amount of self assessed tax(in return)/amount of nterest=remains unpaid=recovered u/s74.
these subsections
13 | If penalty u/s 73/74 imposed= no other penalty applies.
AY SL Ae Ce TAY)
to be an inter-State supply, but which is subsequently held to be an intra-State supply,
shall not be:required to pay any interest on the amount of central tax and State tax or, as the
Transfer of property to be void in certain cases:-
case may be, the central tax and the Union territory tax payable. Provisional Attatchment to protect revenue in certain casesi-
Note : Similar provision are contained in Sec 19 of IGST Act
Where a person- (after any amount has become due from I- Cireumstances:- where during pendency of any proceedings under- Best Judg.
him) Cwith the intention of defrauding the Govt. revenue) Assessment for non-filers of return (u/s 62) Cor) for unregistered person (u/s
creates a charge on or parts with the property belonging to 63)/ Summary Assessment in special cases (u/s 64)/ Inspection, search,
him, or in his possession, seizure (u/s 67)/ SCN and DO for a cases other than fraud(u/s 73) Cor) cases
Sec 78 :- Any amount payable by a taxable person in order passed under this Act shall be paid within a of fraud (u/s 74),
period of 3 months from the date of service of such order failing which recovery proceedings shall be > by way of sale/ mortgage/ exchange/ any other mode 2 - Provisional Attachment :- Commissioner may (by order in writing)
initiated. of T/f,
attach provisionally any property + bank account of the taxable person.(to
Sec 79 :- Proper officer may recover the dues U/s 78 in following manner :- of any of his properties in favour of any other person, protect interest of Govt revenue)
I) | Reduction of dues from the amount by the tax authorities to such person. (Deduction 3- Time period - Every such provisional attachment= cease to have effect, after
from the refund payable) Such charge ftransfer= Void, as against any claim i.ro.
any tax /other sum payable by said person. the expiry of lyear - from date of order under subsec-l.
2) | Recovery by way of detaining / selling any goods belonging to such person.
3) | Recovery from third person from whom money is due or may become due to such person or Proviso- Such charge/transfer= not be void, if made for
recovery from person who holds or may subsequently hold money (banks) for such person. Adequate Consideration, in good faith, &
4) | Detain / Seize any movable / immovable property belon ing to such person until amount is paid - without notice of the pendency of such proceedings under Continuation & Validation of certain recovery proceedings:-
& if the dues are not paid within 30 days then the said property is to be sold and the amount this Act
payable including cost of sale will be recovered from sale proceeds & balance is refundable. * Where any notice of demand = served upon any taxable/ other person, &
S) | Officer will prepare the certificate of dues & send it to the collector of district in - without notice of such tax/ other sum payable by the said iro. "Govt. dues = any appeal/ revision application is filed / any other
which such person owns any property / resides / carries the business & the collector person, or proceedings is initiated, iro. Govt. dues, Then-
will recover such amount as arrears of land revenue.
- with the previous permission of the PO. a) Where = Commissioner = Any recovery proceedings i.r.t. such dues,
6) | By way of making application to Appropriate Magistrate who in turn shall proceed to
recover the amount as if it was a fine imposed by him. such dues shall serve another covered by notice before the disposal of
7) | By enforcing bond /instrument executed under this act / Rules / Registration. Enhanced notice, of demand such appeal etc, may be continued from
iro, the amount, by the stage at which such proceedings stood
Explanation:- for the purpose of this sec, the word person shall include distinct persons as
| referred in sub sec (4) or as the case may be, sec 25(S). J which such Govt. immediately before such disposal.
Tax to be first charged on property:-
dues are enhanced (Without serving fresh notice of demand)
Sec 30 Payment of Tax & other amount in instalments:- Overriding any law for the time being in force, (other than
The Insolvency and Bankruptcy Code, 2016), b) Where = Commissioner = Any recovery proceedings initiated on the
* The provisions for payment of Tax & other amounts in Instalments= allowed Cother than self shall give Intimation
assessment tax) > Any amount payable by a taxable person/ any other such dues basis of demand served upon him, before
of such reduction to
* This benefit can be availed= by making an application to the Commissioner by specifying person, Reduced the disposal of such appeal, etc, may be
him & to appropriate
reasons for such requests. > On account of tax/ interest/ penalty, which he is liable authority with continued i.rt. the amount so reduced,
* Commissioner may- allow the payment in instalments fSubject to maximum 24 monthly to pay to Govt., whom recovery from the stage at which such proceedings
instalments + applicable interest} shall be a First charge on the property, of such taxable/other proceedings is stood immediately before such disposal.
* If default in payment of any instalment = whole outstanding balance payable on such date -become person. pending (Without serving fresh notice of demand)
due and payable immediately, & shall be liable for recovery (without any further notice being served)