GST Dues Recovery is not mandatory during the Search

GST Dues Recovery is Not mandatory during the Search & Investigation : GST Dept.

• The official GST portal is where taxpayers can pay their GST dues. The GST Dept has said emphatically that payment of dues is not required during the search and investigation procedure.
• Because there have been several instances where taxpayers have been pressured and compelled to pay their dues, the GST dept ensured that information is given on to them by officers.
• By submitting DRC-03 on the GST portal, taxpayers can voluntarily settle their dues in part or in whole. The CGST Act of 2017 allows for this under Sections 73(5) and 74(5). They can use their login ID and password to log in. This could relieve taxpayers of their admitted responsibility, interest, and penalty owed as a result of the Show Cause Notice.

• According to Section 79 of the CGST Act, 2017, unpaid or underpaid taxes can only be recovered after a suitable legal process of issuing a notice and receiving an adjudication order confirming that the demand for recovery can be made.
• But during or after the the Search & Investigation procedures, the taxpayer can voluntarily make payments for tax liability as determined by himself or the officer.

Legal situation as per law

• The CBIC stated that under the law, no recovery may be undertaken unless the amount becomes payable as a result of an adjudicating authority’s order.
• “It is clarified that there may not be any condition mandating recovery of tax dues during search, inspection, or inquiry actions,” according to the instruction, which also stated that taxpayers might voluntarily deposit GST responsibility via DRC-03 on the GST portal.
• While advising officials to inform taxpayers about the provisions of voluntary tax payments via DRC-03, the dept also clarified that there is no bar to taxpayers voluntarily making payments based on ascertainment of their liability for non-payment/short payment of taxes before or at any stage of such proceedings.
• The decision is significant because there have been increasing reports of GST officers adopting force to recover funds during searches.
• IFCCL strongly recommends you to keep educated and avoid any unwelcome coercion. If you request help, please contact our experts. You can also contact us via phone.

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