Tax Collected But not Deposited—Filing of Reply in Form DRC06—CA. Satyadev Purohit

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The Tax Publishers GST--Recovery of Tax Tax Collected But not Deposited--Filing of Reply in Form DRC-06 CA. Satyadev Purohit Where any person (whether registered or unregistered) collects any amount representing as tax but fails to deposit the same in the government account, the proper office is empowered to recover the same from such person along with interest and penalty. The present write-up elaborates the manner of issuance of notice by the proper officer and filing reply by the taxpayer. 1. Recovery of tax collected but not deposited There may be cases that any registered or unregistered person may have collected any amount as representing the tax under the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "the CGST Act"), but has not paid said amount to the Government. In order to ensure recovery of such amount, section 76 is enacted under the CGST Act. As per sub-section (1) of section 76, every person who has collected from any other person any amount as representing the tax under the 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. 2. Service of notice calling for payment of tax and penalty As per sub-section (2) of section 76, where any amount is required to be paid to the Government that is collected as tax, and which has not been so paid, the proper officer may serve on the person liable to pay such amount a notice in 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 the Act. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

GST--Recovery of Tax

Tax Collected But not Deposited--Filing of Reply in Form DRC-06

CA. Satyadev Purohit

Where any person (whether registered or unregistered) collects any amount representing as tax but fails to deposit the same in the government account, the proper office is empowered to recover the same from such person along with interest and penalty. The present write-up elaborates the manner of issuance of notice by the proper officer and filing reply by the taxpayer.

1. Recovery of tax collected but not deposited

There may be cases that any registered or unregistered person may have collected any amount as representing the tax under the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "the CGST Act"), but has not paid said amount to the Government. In order to ensure recovery of such amount, section 76 is enacted under the CGST Act.

As per sub-section (1) of section 76, every person who has collected from any other person any amount as representing the tax under the 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.

2. Service of notice calling for payment of tax and penalty

As per sub-section (2) of section 76, where any amount is required to be paid to the Government that is collected as tax, and which has not been so paid, the proper officer may serve on the person liable to pay such amount a notice in 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 the Act.