Notified clarification w.r.t recovery of self-assessed tax w.e.f. January 01, 2022

Insertion of New Explanation in Section 75(12) - General provisions relating to determination of tax – Section 114 of the Finance Act, 2021

Current provisions

Notified provisions

(12) Notwithstanding anything contained in section 73 or section 74, where any amount of self-assessed tax in accordance with a return furnished under section 39 remains unpaid, either wholly or partly, or any amount of interest payable on such tax remains unpaid, the same shall be recovered under the provisions of section 79.

In Section 75(12), the following Explanation shall be inserted:

“Explanation.––For the purposes of this sub-section, the expression 'self-assessed tax' shall include the tax payable in respect of details of outward supplies furnished under section 37, but not included in the return furnished under section 39.”

The ambit of the term “self-assessed tax” is proposed to be widened. Meaning thereby that now recovery can be initiated by the officer even for the outward supply liability shown in the GSTR-1 filled under Section 37 of the CGST Act.

But it is to be noted that Section 75(12) of the CGST Act starts with non-obstante clause that “Notwithstanding anything contained in section 73 or section 74….”

Thus, an exceptional view can be given to the said amendment that, the recovery proceedings, in respect of ‘self-assessed tax’ on outward supplies which have been declared in Form GSTR-1 but not included in Form GSTR-3B, can be initiated straightaway under Section 79 (i.e. through various modes like detaining/selling goods belonging to defaulter which are under control of the department, garnishee proceedings, distaining and selling of movable or immovable property belonging to the defaulting person, etc.) without even resorting to proceedings under Section 73 or Section 74 of the CGST Act.