how to pay tax determined under audit under section 65

[RAGHAVENDRA K]

Dear sir,

how to discharge tax determined under GST audit u/s 65 can I pay it under DRC-3 under section 73 (5) as voluntary payment ?

[Shilpi Jain]

Yes. This can be paid in DRC-03 as stated in your query

[KASTURI SETHI]

It is not a voluntary payment of GST. It is not self disclosure. You intend to pay on being pointed out by the department. In case you pay GST along with interest through DRC-03 showing voluntary payment of tax under Section 73 (5), the department may accept such payment of tax under Section 74(5) and not under Section 73 (5) The difference between both sub-sections i.e. Section 73(5) and 74(5) is that penalty 15 % of tax not paid is required to be to be deposited under Section 74(5). .

In order to close the proceedings, better option is to pay tax with interest and penalty otherwise SCN will be issued.

[Shilpi Jain]

The important aspect as pointed out by Kasturi sir would be that there should not be any suppression or fraud involved in this case. If that is so penalty should not be liable. This can be contended in the reply given to any notice that maybe issued by the department.

[Shilpi Jain]

Also if you look at the provision in section 73 (5), even where the tax is paid as ascertained by the proper officer the penalty should not be applicable. There does not seem to be a reference of voluntary payment in such provision.

So as long as there is no allegation of fraud, penalty should not be liable

[KASTURI SETHI]

I concur with all the views of Madam Shilpi Jain.

[Amit Agrawal]

Legal position is properly explained by Ms. Shilpi Jain. And practically what happens on ground, generally, is also duly explained by Sh Kasturi Sethi.

In case of difference of views between assessee and tax-dept. (whether a particular situation is covered either u/s 73 (5) or u/s 74 (5)), option left for assessee is either to get SCN and defend itself judicially or pay penalty & close the matter.

[KASTURI SETHI]

Sh. Amit Agrawal Ji,

Sir, You have made the position crystal clear. Thanks a lot for your inputs.

AI Summary

Payment of audit-assessed GST via DRC-03 may be accepted but risks penalty if suppression or fraud is alleged, or litigation option remains.
Tax determined by a GST audit can be paid via DRC-03; departments often accept such payments, but the characterisation matters: if fraud or suppression is alleged the department may treat the payment under the provision attracting penalty, while where no fraud is alleged the voluntary-payment provision for audit-assessed tax operates and penalty is not ordinarily applicable, leaving the taxpayer the practical choice to pay with interest (and contest penalty if demanded) or litigate after a show-cause notice.