Tax Collected But Not Paid To Government [Section 76] - GST Ready Reckoner - GST

Tax Collected But Not Paid To Government [ Section 76] Amount collected must be deposited with the government Every person who has collected from any other person any amount as representing the tax under this Act, and has not paid the said amount to the Government, shall forthwith pay the said amount to the Government, irrespective of whether the supplies in respect of which such amount was collected are taxable or not. In case of default of payment, issue show-cause notice Where any amount is required to be paid to the Government and which has not been so paid, the proper officer may serve on the person liable to pay such amount a notice requiring him to show cause as to why the said amount as specified in the notice, should not be paid by him to the Government; and why a penalty equivalent to the amount specified in the notice should not be imposed on him under the provisions of this Act. Obligation of Person to pay the due along with interest The proper officer shall determine the amount due from such person and thereupon such person shall pay the amount so determined. The person is also be liable to pay interest thereon at the rate specified under section 50 from the date such amount was collected by him to the date such amount is paid by him to the Government. Opportunity of being heard An opportunity of hearing shall be granted where a request is received in writing from the person to whom the notice was issued to show cause. Time limit for issuance of order The proper officer shall issue an order within one year from the date of issue of the notice. Period stay excluding Where the issuance of order is stayed by an order of the court or Appellate Tribunal, the period of such stay shall be excluded in computing the period of one year. Order must be speaking order The proper officer, in his order, shall set out the relevant facts and the basis of his decision. Manner of order of Adjustment of Amount Of Tax The amount paid to the Government shall be adjusted against the tax payable, if any, by the person Where any surplus is left after the adjustment, the amount of such surplus shall either be credited to the Fund or refunded to the person who has borne the incidence of such amount. The person who has borne the incidence of the amount, may apply for the refund of the same in accordance with the provisions of section 54. TO KEEP IT SIMPLER - This is reiterates that the concept of unjust enrichment is applicable to the provisions of GST also. Once a supplier has collected any amount as tax from any person, that amount needs to be deposited with the government failing which he shall be subject to interest and penalty