Tax collected but not paid: collectors must remit amounts, face show cause notice, penalty exposure and interest liability.

Collectors who have taken any amount as tax under the Act must immediately remit it to the Government irrespective of taxability of the supply. The proper officer may serve a show cause notice where payment has not been made, consider representations, determine the amount due and issue a reasoned order within one year (excluding judicial stays). The collector is liable for interest from collection to payment; an opportunity of hearing must be granted if requested. Amounts paid will be adjusted against tax liability and any surplus credited to the Fund or refunded under the Act's refund procedure.

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