What will happen when Tax collected but not paid to Government

Tax collected but not paid to Government (Section 76 of the CGST Act, 2017):

Every person who has collected any amount as representing the GST and has not paid same to the Government,
is required to pay said amount with interest, irrespective of whether the supplies in respect of which such amount
was collected are taxable or not (as per section 76(1) of the CGST Act, 2017).
In case of failure, proper officer can issue a

Show cause notice
to him proposing recovery and imposition of penalty equalent to
the amount specified in the notice (as per section 76(2) of the CGST Act, 2017)

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As per section 76(3) of the CGST Act, 2017, the proper officer shall, after considering the representation, if any,
made by the person on whom the notice is served under sub-section (2), determine the amount due from such
person and thereupon such person shall pay the amount so determined.

As per section 76(4)of the CGST Act, 2017, the person referred to in sub-section (1) shall in addition to paying the
amount referred to in sub-section (1) or sub-section (3) also be liable to pay interest thereon at the rate specified
under section 50 from the date such amount was collected by him to the date such amount is paid by him to the
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As per section 76(5)of the CGST Act, 2017, an opportunity of hearing shall be granted where a request is received
in writing from the person to whom the notice was issued to show cause.
As per section 76(6)of the CGST Act, 2017, the proper officer shall issue an order within one year from the date of
issue of the notice and such order issued in Form GST DRC-07. This order shall be treated as Recovery Notice.
As per section 76(7)of the CGST Act, 2017, where the issuance of order is stayed by an order of the court or
Appellate Tribunal, the period of such stay shall be excluded in computing the period of one year.
As per section 76(8)of the CGST Act, 2017, the proper officer, in his order, shall set out the relevant facts and the
basis of his decision.

As per section 76(9)of the CGST Act, 2017, the amount paid to the Government under sub-section (1) or subsection
(3) shall be adjusted against the tax payable, if any, by the person in relation to the supplies referred to in
sub-section (1).
As per section 76(10)of the CGST Act, 2017, where any surplus is left after the adjustment under sub-section (9), the
amount of such surplus shall either be credited to the Fund or refunded to the person who has borne the incidence
of such amount.
As per section 76(11)of the CGST Act, 2017, the person who has borne the incidence of the amount, may apply
for the refund of the same in accordance with the provisions of section 54

About Commerce Now

Hi, Myself CMA(semi qualified Cost Accountant) Mousam Roy having more than 5 years experience in commerce field,teaching field as well as professional field with working with PSU and big Firm.


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