🔒

^®

Subscribe Free GST updates on...

Subscribe to Best GST Library of India and get ahead of the rest. Click here for plans.

Recovery proceedings in GST?

In our previous article, we discussed demand procedure in GST. To continue with the same series, today we are discussing recovery proceedings in GST. 

The present article briefly explains the provisions relating to initiation of recovery proceedings under GST; various modes of recovery under GST and preventive action for recovery of pending dues.

Initiation of recovery proceedings under GST [Section 78]-

The recovery proceedings will be initiated in case the amount confirmed vide the order is not paid by the taxpayer within a period of three months from the date of service of the order.

Modes of recovery of the amount under GST-

The proper officer is empowered to recover the pending amount through various modes of recovery. The same are highlighted hereunder-

1. Recovery from the money under the control of the officer [Section 79(1)(a) read with rule 143]-

The proper officer himself or any other specified officer is empowered to deduct the pending amount from any amount due to such person (For example- Amount of refund).

2. Recovery by selling the goods under the control of the officer [Section 79(1)(b) read with rule 144]-

The pending amount can be recovered by the proper officer by detaining and selling any goods belonging to the person which is under the control of the proper officer.

The proper officer needs to follow the below procedure to carry out such recovery-

• Firstly, the proper officer needs to prepare an inventory of the goods and estimate the market value of such goods.
• The notice in Form GST DRC-10 will be issued for auction (e-auction) of such goods. Such notice should indicate goods to be sold and the purpose of sale of the goods.
• The successful bidder will be issued a notice in Form GST DRC-11 asking him to make the required payment within a period of 15 days from the date of auction.
• The possession of the goods will be transferred to the successful bidder on full payment of the amount. Accordingly, a certificate in Form GST DRC-12 will also be issued.

Notably, the process of the auction will be cancelled and the goods will be released if the pending amount is paid by the taxpayer before issuance of notice in Form GST DRC-10.

3. Recovery from a third person [Section 79(1)(c) read with rule 145]-

The proper officer is bestowed with the power to issue a notice in Form GST DRC-13 to the third person as mentioned in Section 79(1)(c). Such notice will be directing the third person to deposit the amount as specified in the notice.

On payment of specified amounts mentioned in the notice, the proper officer will issue a certificate to the third person in Form GST DRC-14.

4. Recovery by sale of movable/ immovable property [Section 79(1)(d) read with rule 147]-

The proper officer is empowered to distrain any movable/ immovable property belonging to the taxpayer and detain the same until the pending amount is paid. In case the pending amount is not paid within a period of 30 days, the proper officer can proceed to sell such movable/ immovable property.

The proper officer is required to follow the below procedure to distrain and sell the movable/ immovable property-

• Firstly, the proper officer needs to prepare a list of movable and immovable property belonging to the taxpayer and estimate the value thereon as per prevalent market price.
• The proper officer will issue an order of attachment/ distraint and a notice for the sale of property in Form GST DRC-16. The order will prohibit any transaction with regard to the mentioned movable/ immovable property. Accordingly, based on the type of property, the following action would be taken-

Type of property	Corresponding Action
An immovable property	The order of attachment/ distraint will be affixed on the property and the same will remain affixed till the confirmation of the sale.
A movable property	The proper officer will seize the property. The custody of the property will be with either the proper officer or any other authorized officer.

• The proper officer will issue a notice in Form GST DRC-17 for auction (e-auction) of the attached/ distrained property. The notice should clearly indicate the details of a property to be sold and the purpose of the sale.
• However, the investigation would be initiated by the proper officer and the sale of the property would be postponed, in case the claim/ objection is raised stating that the property is not liable to the attachment/ distraint.
• The proper officer will issue a notice in Form GST DRC-11 to the successful bidder asking him to make the payment within a period of 15 days from the date of the notice.
• Post receipt of payment from the successful bidder, the proper officer will issue a certificate in Form GST DRC-12 mentioning the following details-
• Details of the property sold;
• Date of transfer;
• Details of the bidder; and
• The amount paid.
• The successful bidder, to whom the title of the property is transferred, will be liable to pay any amount (including stamp duty; tax or fee payable) in respect of the transfer of property to the Government.

​Notably, the process of the auction will be cancelled and the goods will be released if the pending amount, along with other expenditure, is paid by the taxpayer before issuance of notice in Form GST DRC-17.

5. Recovery via execution of a decree etc. [rule 146]-

In case the amount is payable to the taxpayer in the execution of a decree of a civil court for the payment of money or for the sale in the enforcement of a mortgage/ charge.

The proper officer can send a request in Form GST DRC-15 to the court (subject to the provisions of the Code of Civil Procedure). Accordingly, the court can execute the attached decree and credit the net proceeds towards pending dues.

6. Recovery through land revenue authority [Section 79(1)(e) read with rule 155]-

The proper officer can recover the pending dues by sending a certificate to the Collector/ Deputy Commissioner of the district/ any other officer authorized in Form GST DRC-18. Such certificate enables the concerned authority to recover the pending amount as if it were an arrear of land revenue.

7. Recovery through the court [Section 79(1)(f) read with rule 156]-

The proper officer may make an application in Form GST DRC-19 before the appropriate Magistrate. Accordingly, such Magistrate will proceed to recover the pending amount as if it were a fine imposed by the Magistrate. 

Preventive actions for recovery of the pending dues

The provisions of section 81, section 82 and section 83 cover some of the preventive actions in order to recover the pending dues from the defaulting taxpayer. The same is explained in the following table-

Particulars	Details
Section 81 deals with the transfer of property to be void in certain cases	Transfer will be void if undertaken with the intention to defraud the department/ Government. However, the transfer will not be void if the same is undertaken for adequate consideration, in good faith and without the notice of pendency of such proceedings or with the previous permission of the proper officer.
Section 82 states that tax to be the first charge on property	-
Section 83 deals with the provisional attachment to protect revenue in certain cases	During the pendency of proceedings, the Commissioner has powers to provisionally attach the property to protect the interest of the revenue. For the same, the Commissioner needs to pass an order in Form GST DRC-22.

 

The article given are very much useful to the taxpayers and to the consultants and Advocates.

ITC cannot be denied merely on the ground of non reflection in GSTR-2A : High Court

24 Apr 2024   7.02k

ITC Mismatch demand set aside by High Court because authorities failed to consider certificate obtained by buyer from the supplier and CA of supplier.

22 Apr 2024   8.28k

Taxpayer assigned to State GST Authorities cannot be assessed by Central GST Authorities and vice-a-versa: High Court

19 Apr 2024   6.07k

Govt defers implementation of Special Registration, Return Filing For Pan Masala, Gutkha Companies till May 15.

12 Apr 2024   4.53k

Amid GST portal deficiency, GSTN recommends extension of GSTR-1 due date for the month of March.

12 Apr 2024   4.91k

Quick Links

GST Library

Login
Register
About GST Library
Subscription (Pricing)
GST Updates
GST Calendar
GST Case Laws
GST Case Laws Sitemap
Full Site Search
GST Vides

GST Notifications
GST Act & Rules (Section-wise)
GST Act & Rules (Chapter-wise)
GST Forms
GST Forms (Category-wise)
GST Rates
Classification by CTA (Chapter-wise)
Classification by CTA (Search Tool)
E-way Bill
Finance Bill

E-invoice Applicability Calculator
Inverted Duty Refund Calculator
GST Set-off Calculator
ITC Reversal Calculator
GSTR-3B Manual
GSTR-9 Manual
GSTR-9C Manual

Others

GST e-books
GST Domains Sale
About Us
Our Services
Contact Us
Privacy Policy
Terms & Conditions

taxreply.com © 2024. All Rights Reserved