Tax Recovery Proceeding Under GST Law [Section 79] - GST Ready Reckoner - GST

Tax Recovery Proceeding Under GST Law Intimation of certain amounts liable to be recovered under section 79 of the CGST Act [ Rule 142B ] The proper officer shall intimate, electronically on the common portal, the details of the said amount in FORM GST DRC-01D [ Rule 142B(1) ] Where, in accordance with section 75 read with rule 88C , or otherwise, any amount of tax or interest has become recoverable under section 79 and the same has remained unpaid, directing the person in default to pay the said amount, along with applicable interest, or, as the case may the amount of interest, within seven days of the date of the said intimation and the said amount shall be posted in Part-II of Electronic Liability Register in FORM GST PMT-01. Deemed to be Notice [ Rule 142B(2) ] The intimation referred to in sub-rule (1) shall be treated as the notice for recovery. Applicable other Rules [ Rule 142B(3) ] Where any amount of tax or interest specified in the intimation referred to in sub-rule (1) remains unpaid on the expiry of the period specified in the said intimation, the proper officer shall proceed to recover the amount that remains unpaid in accordance with the provisions of rule 143 or rule 144 or rule 145 or rule 146 or rule 147 or rule 155 or rule 156 or rule 157 or rule 160. Mode of Recovery of Tax [Section 79] Where any amount payable by a person to the Government under this Act or the rules made thereunder is not paid. The proper officer shall proceed to recover the amount by one or more of the following modes, namely: a) Recovery by deduction from any money Owed [ Section 79(1)(b) read with Read with rule 143 of CGST Rules] Where any amount payable or not paid, by a person to the Government , the proper officer may require, in FORM GST DRC-09 , a specified officer to deduct the amount from any money owing to such defaulter. b) Procedure of Recovery by selling of goods under the control of proper officer [Section 79(1)(b) read with Rule 144 of CGST Rules] Goods sold to the extent recovery of demand the proper officer shall prepare an inventory and estimate the market value of such goods and proceed to sell only so much of the goods as may be required for recovering the amount payable along with the administrative expenditure incurred on the recovery process. Goods sold through auction The proper officer sold the goods through Auction or E-Auction notice shall be issued in FORM GST DRC-10 clearly indicating the goods to be sold and the purpose of sale. Proper officer may cancel auction and rearrange the auction in following situation where no bid is received or the auction is considered to be non-competitive due to lack of adequate participation or due to low bids. Last date of submission of bid or date of Auction shall not be earlier than fifteen days from the date of issue of the notice in Form GST DRC-10 Exception:- where the goods are of perishable or hazardous nature or where the expenses of keeping them in custody are likely to exceed their value, the proper officer may sell them forthwith. Specified Pre-deposit Amount The proper officer shall issue a notice to the successful bidder in FORM GST DRC-11 requiring him to make the payment within a period of 15 days from the date of auction. On payment of the full bid amount the possession of the said goods shall be transferred to the successful bidder and issue a certificate in FORM GST DRC-12 . Cancelled the Auction Proceeding Where the defaulter pays the amount under recovery, including any expenses incurred on the process of recovery, before the issue of the notice In FORM GST DRC10 the proper officer shall cancel the process of auction and release the goods. c) Procedure of Recovery from third parties [Section 79(1)(c) Read with rule 145 of CGST Rules ] Issue the notice to third party the proper officer may issue a notice in writing in Form GST DRC-13 , require any 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 Government; either forthwith upon the money becoming due or being held, or within the time specified in the notice not being before the money becomes due or is held, so much of the money as is sufficient to pay the amount due from such person or the whole of the money when it is equal to or less than that amount; Notice is biding on third person every person to whom the notice is issued in written in Form GST DRC-13 shall be bound to comply with such notice, and in particular, where any such notice is issued to a post office, banking company or an insurer, it shall not be necessary to produce any pass book, deposit receipt, policy or any other document for the purpose of any entry, endorsement or the like being made before payment is made, notwithstanding any rule, practice or requirement to the contrary; Default in payment by the third person The person to whom a notice in written in Form GST DRC-13 has been issued, fails to make the payment in pursuance thereof to the Government, he shall be deemed to be a defaulter in respect of the amount specified in the notice and all the consequences of this Act or the rules made thereunder shall follow; Extension for payment by third person The officer issuing a notice i n written in Form GST DRC-13 may, at any time, amend or revoke such notice or extend the time for making any payment in pursuance of the notice; Payment by third Person Any person making any payment in compliance with a notice issued in written in Form GST DRC-13 shall be deemed to have made the payment under the authority of the person in default and such payment being credited to the Government shall be deemed to constitute a good and sufficient discharge of the liability of such person to the person in default to the extent of the amount specified in the receipt; Any Person can Discharge the liability of defaulter any person discharging any liability to the person in default after service on him of the notice issued in written in Form GST DRC-13 shall be personally liable to the Government to a) the extent of the liability discharged or b) to the extent of the liability of the person in default for tax, interest and penalty, whichever is less ; Proves by defaulter person no due to the person in default or did not hold any money where a person on whom a notice is served in written in Form GST DRC-13 proves to the satisfaction of the officer issuing the notice that the money demanded or any part thereof was not due to the person in default or that he did not hold any money for or on account of the person in default, at the time the notice was served on him, nor is the money demanded or any part thereof, likely to become due to the said person or be held for or on account of such person, nothing contained in this section shall be deemed to require the person on whom the notice has been served to pay to the Government any such money or part thereof. Detaining / attachment of movable or immovable property and adjustment of tax dues from sale proceeds [Section 79(1)(d)] the proper officer may, in accordance with the rules to be made in this behalf, distrain any movable or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid; and in case, any part of the said amount payable or of the cost of the distress or keeping of the property, remains unpaid for a period of thirty days next after any such distress, may cause the said property to be sold and with the proceeds of such sale, may satisfy the amount payable and the costs including cost of sale remaining unpaid and shall render the surplus amount, if any, to such person; Procedure of Recovery from sale of immovable or movable property [Read rule 147] Prepare the list of movable or immovable property The proper officer shall prepare a list of movable and immovable property belonging to the defaulter, and estimate their value as per the prevalent market price and issue an order of attachment or distraint and a notice for sale in FORM GST DRC- 16 prohibiting any transaction with regard to such movable and immovable property as may be required for the recovery of the amount due: Property which can attached in debt and shares [Rule 151] Attachment of any property as a debt not secured by a negotiable instrument, a share in a corporation, or other movable property not in the possession of the defaulter except for property deposited in, or in the custody of any Court, shall be attached in by a written order in FORM GST DRC-16 prohibiting.- in the case of a debt , the creditor from recovering the debt and the debtor from making payment thereof until the receipt of a further order from the proper officer; in the case of a share , the person in whose name the share may be standing from transferring the same or receiving any dividend thereon; in the case of any other movable property , the person in possession of the same from giving it to the defaulter. Affixed copy of order at office premises - A copy of such order shall be affixed on some conspicuous part of the office of the proper officer, and another copy shall be sent , in the case of debt, to the debtor, and in the case of shares, to the registered address of the corporation and in the case of other movable property, to the person in possession of the same. Deemed to be paid by defaulter:- A debtor prohibited under this rule, may pay the amount of his debt to the proper officer, and such payment shall be deemed as paid to the defaulter. Sale of attched or detained property:- the proper officer may, sell mention above instrument or a share through a broker instead of selling it by public auction, and Step to discharge the liability form the sale proceeds First reduce the reduced by broker commission Second reduce discharge of the amount under recovery remaining balance pay to the owner of such instrument or a share. Send the Copy of order of attachment or distraint to all concern department, Such property shall be removed only on the written instructions from the proper officer to that effect. Affixed the notice till Where the property subject to the attachment or distraint is- In case of immovable property, the order of attachment or distraint shall be affixed on the said property and shall remain affixed till the confirmation of sale; In case of movable property , the proper officer shall seize the said property in accordance with the provisions of chapter XIV of the Act and the custody of the said property shall either be taken by the proper officer himself or an officer authorised by him. Sale of property movable or immovable through Auction The property attached or distrained shall be sold through auction, including e-auction, for which a notice shall be issued in FORM GST DRC- 17 clearly indicating the property to be sold and the purpose of sale. Auction may be cancelled by the proper officer Where the defaulter pays the amount under recovery, including any expenses incurred on the process of recovery, before the issue of the notice in FORM GST DRC-17 the proper officer shall cancel the process of auction and release the goods. Cancelled the auction and proceed for re-auction The proper officer shall cancel the process and proceed for re-auction where no bid is received or the auction is considered to be non-competitive due to lack of adequate participation or due to low bids. Date of submission of Bid and Specified Pre-bid Deposit The last day for the submission of the bid or the date of the auction shall not be earlier than fifteen days from the date of issue of the notice in FORM GST DRC- 17 Exception:- where the goods are of perishable or hazardous nature or where the expenses of keeping them in custody are likely to exceed their value, the proper officer may sell them forthwith. The proper officer may specify the amount of pre-bid deposit to be furnished in the manner specified by such officer, to make the bidders eligible to participate in the auction, Pre-bid deposit may be returned to the unsuccessful bidders or, Forfeited pre-bid deposit in case the successful bidder fails to make the payment of the full amount , as the case may be. Raise objection regarding attachment Where any claim is preferred or any objection is raised with regard to the attachment or distraint of any property on the ground that such property is not liable to such attachment or distraint, the proper officer shall investigate the claim or objection and may postpone the sale for such time as he may deem fit. The person making the claim or objection must adduce evidence to show that on the date of the order issued in FORM GST DRC- 16 he had some interest in, or was in possession of, the property in question under attachment or distraint. Where, upon investigation, the proper officer is satisfied that, property was not in possession of defaulter:- such property was not in the possession of the defaulter or of any other person on his behalf or that, being in the possession of the defaulter on the said date, Property was in possession of defaulter:- it was in his possession, not on his own account or as his own property, but on account of or in trust for any other person, or partly on his own account and partly on account of some other person, the proper officer shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or distraint. Rejection of claim or objection raise on the attached property The proper officer found during investigation, such property was in the possession of defaulter and not in the other person then Proper officer reject the claim or objection and procced with the process of sale through auction. Notice issue to successful bidder The proper officer shall issue a notice to the successful bidder in FORM GST DRC-11 requiring him to make the payment (i.e. amount, including stamp duty, tax or fee payable) within a period of fifteen days from the date of such notice to the Government and after the said payment is made, he shall issue a certificate in FORM GST DRC-12 specifying the details of the property, date of transfer, the details of the bidder and thereafter, the rights, title and interest in the property shall be deemed to be transferred to successful bidder. where the highest bid is made by more than one person and one of them is a co-owner of the property, he shall be deemed to be the successful bidder. Prohibition against bidding or purchase by officer [Rule 148] No officer or other person having any duty to perform in connection with any sale under the provisions of this Chapter shall, either directly or indirectly, bid for, acquire or attempt to acquire any interest in the property sold. Prohibition against sale on holiday [Rule 149] No sale under the rules under the provision of this chapter shall take place on a Sunday or other general holidays recognized by the Government or on any day which has been notified by the Government to be a holiday for the area in which the sale is to take place. Assistance by police [Rule 150] The proper officer may seek such assistance from the officer-in-charge of the jurisdictional police station as may be necessary in the discharge of his duties and the said officer-in-charge shall depute sufficient number of police officers for providing such assistance. Disposal of proceeds of sale of goods and movable or immovable property [Rule 154] Step for apportionment of realised amount from sale of sale of goods and movable or immovable property rst , be appropriated against the administrative cost of the recovery process; next , be appropriated against the amount to be recovered or to the payment of the penalty payable under section 129(3) , as the case may be; next , be appropriated against any other amount due from the defaulter under the CGST ACt, IGST Act, or SGST/UTGST Act and the rules made thereunder; and the balance amount In case of registered person, shall be credited to the electronic cash ledger of the owner of the goods or conveyance as the case may be, in case the person is registered person, In case of not required to registered under this act , the said amount shall be credited to the bank account of the person concerned. where it is not possible to pay the balance of sale proceeds , as per clause (d) of sub-rule (1) of rule 154, to the person concerned within a period of six months from the date of sale of such goods or conveyance or such further period as the proper officer may allow, such balance of sale proceeds shall be deposited with the Fund. [Rule 154(2)] . Recovery of tax dues as arrears of land revenue [ Rule 155 ] The proper officer may prepare a certificate signed by him specifying the amount due from such person and send such certificate to the Collector of the District in FORM GST DRC-18 in which such person owns any property or resides or carries on his business and on receipt of such certificate. The Collector shall proceed to recover from such person the amount specified as if it were an arrear of land revenue Recovery through Court [ Rule 156 ] Where an amount is to be recovered as if it were a fine imposed under the Code of Criminal Procedure, 1973, the proper officer shall make an application before the appropriate Magistrate in FORM GST DRC-19 to recover from the defaulter, the amount specified there under as if it were a fine imposed by him. Recovery from Company in liquidation [ Rule 160 ] Where the Company is under liquidation, the Commissioner shall notify the liquidator for the recovery of any amount representing tax, interest, penalty or any other amount due under the Act in FORM GST DRC-24 . For the purposes of Section 79 of the GST Act, the word person shall include distinct persons . Recovery In respect to arrears As per Section 79(3 ) Where any amount of tax, interest or penalty is payable by a person to the Government under any of the provisions of this Act or the rules made thereunder and which remains unpaid, the proper officer of State tax or Union territory tax, during the course of recovery of said tax arrears, may recover the amount from the said person as if it were an arrear of State tax or Union territory tax and credit the amount so recovered to the account of the Government. Amount recovered Less will be credited in Proportion of Respective Government Dues As Stated in Section 79(4) Where the amount recovered is less than the amount due to the Central Government and State Government, the amount to be credited to the account of the respective Governments shall be in proportion to the amount due to each such Government