Liability Disclosed in Annual Return but not paid

[Mihir Modak]

If liability is disclosed in annual return GSTR-9/9C but not paid. Whether limitation period as per section 73/74 are applicable in such cases for recovery of tax dues?

 

[Ganeshan Kalyani]

Refer Sec 49(8) it says at clause (a) that the taxpayer shall pay tax which is due in return of previous periods. It mentions at (c) any other amount payable under this Act or the rules made thereunder including the demand determined under section 73 or section 74.

In my view, the above provision overrides sec 73 and 74 as it mentions that tax shall be paid that is due for past period including tax determined u/s 73 and 74.

[KASTURI SETHI]

(i) In this scenario, Section 79 comes into play. Under Section 79 of CGST Act Govt. has vast powers to recover Govt. dues which are declared /admitted in GST returns.

(ii) When any Govt. dues are admitted in GST Returns, the registered person is statutorily bound to deposit Govt. dues on its own or the same will be recovered by the Proper Officer as per the procedure laid down under Section 79 of CGST Act, 2017 read with Rules 143, 144, 145, 146, 147, 155 and 156 of CGST Rules, 2017. Such admitted and declared Govt. dues can be recovered without any time limit. 

(iii) Limitation period laid down in Section 73 and 74 is not applicable to the instant case.

(iv) Section 79 corresponds to Section 87 of erstwhile Finance Act, 1994 (Service Tax law) 

[Shilpi Jain]

Any demand of tax would have to adhere to s 73/74 timelines.

[Mihir Modak]

Thank you All experts for Inputs. 

Will lilke to add reference of Section 75(12) which reads as 

"Notwithstanding anything contained in section 73 or section 74 ⁶[or section 74A], 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."

[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 section provides specific recovery provision in respect of Self Assessed Tax for return filed under section 39 only or disclosed in GSTR-1 and Not Paid. It Does not include Liability as per Annual Return.

Further Section 61 - Scrutiny of Returns says..... in case of discrepancy observed if any may be informed to dealer. If not paid by dealer then proceed to recover the amount under section 73 or section 74.

It seems the Self Assessed liability can be recovered directly under section 79 without time limit. For other possibilities 73/74 Limits are applicable. 

Will appreciate further views on this.

[Shilpi Jain]

Section 39 return is GSTR-3B

[Shilpi Jain]

Section 39 return does not include GSTR-1 also

[KASTURI SETHI]

 SECTION 79. Recovery of tax. — (1) Where any amount payable by a person to the Government under any of the provisions of 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-------:-

Section 79 talks of "payable" and any amount payable may be by virtue of self-assessment or determination by the Proper Officer. Determination of tax may be by way of Adjudication Order, Order-in-Appeal, GST Tribunal Order etc. Thus recovery of tax under Section 79 is not restricted to Section 39. Section 79 is a sea.

AI Summary

Debate on GST Returns: Does Section 79 Allow Unlimited Time for Recovering Unpaid Dues, Overriding Sections 73 and 74? A discussion on a forum addresses the issue of unpaid tax liabilities disclosed in annual GST returns, specifically whether the limitation periods in Sections 73 and 74 apply for recovery. One participant suggests that Section 49(8) mandates payment of past dues, potentially overriding Sections 73 and 74. Another highlights Section 79 of the CGST Act, which grants the government broad powers to recover admitted dues without a time limit, making Sections 73 and 74 inapplicable. Additional comments reference Section 75(12) and Section 61, indicating self-assessed taxes can be recovered directly under Section 79, while other cases may follow Sections 73/74 timelines.