Title: A trap for the taxpayers in GST wherein apparently five provisions are simultaneously applicable for levy of penalty/recovery for delayed payment of tax and even for a slightest of delays, and thereby due to this lack of clarity taxpayers are falling in the trap without any saviour forthcoming.
One of the plight for taxpayers in GST is that there are apparently five provisions (without including the provisions of fraud, or wilful misstatement etc) which charge them for delayed payment of Tax and ground reality is that these provisions are being invoked arbitrarily with a complete lack of clarity at ground level. The provisions are as follows-
a) Section 73(9)–The proper officer shall, after considering the representation, if any, made by person chargeable with tax, determine the amount of tax, interest and a penalty equivalent to ten per cent. of tax or ten thousand rupees, whichever is higher, due from such person and issue an order.
b) Section 73(11) – Notwithstanding anything contained in sub-section (6) or sub-section (8), penalty under sub-section (9) shall be payable where any amount of self-assessed tax or any amount collected as tax has not been paid within a period of thirty days from the due date of payment of such tax.
c) Section 75(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.
d) Section 122(1)(iii)- Where a taxable person who collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due, he shall be liable to pay a penalty of ten thousand rupees or an amount equivalent to the tax evaded, whichever is higher.
e) Section 122(2)(a)- Any registered person who supplies any goods or services or both on which any tax has not been paid or short-paid or erroneously refunded, or where the input tax credit has been wrongly availed or utilised, for any reason, other than the reason of fraud or any wilful misstatement or suppression of facts to evade tax, shall be liable to a penalty of ten thousand rupees or ten per cent. of the tax due from such person, whichever is higher.
Possible situations-
a) When although complete tax has been paid but interest not paid, provisions of Section 73(11) are invoked, citing its mandatory application.
b) When both tax and interest are pending, provisions of Section 73(9) are invoked citing that 30 days from the date of issuance of notice is expired.
c) When the limitation period has expired and no other option is available , provisions of Section 75(12) are invoked stating as self-assessed liability and stating that there is no requirement of order.
d) When the amount is huge and the delay is more than three months then citing the “interest of revenue” and “mandatory nature of penalty”, equal penalty U/Sec 122(1)(iii) is invoked even though tax was paid in GSTR-3B and there was no intent to evade.
e) Provision of Section 122(2)(a) are invoked with Section 73 for levy of penalty and sometime Section 122(2)(a) individually is invoked as there is no time limit for levy of penalty.
Its like a trap for the taxpayers wherein even for a slightest of delays, they are falling with little saviour coming and more so after the Circular No. 238/32/2024-GST wherein through Section 75(12), after clarification on self-assessed liability.
There cannot be a Hobson’s choice that let the taxpayer fall in either of the provisions. There needs to be clarity and one provision for one offence.
Share this content: