Sec 78 – Initiation of recovery proceedings

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Sec 78 – Initiation of recovery proceedings 2017-04-14T11:24:24+00:00

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  • Ashish BadalaCA Ashish Badala
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    #1397 |

    Any amount payable by a taxable person in pursuance of an order passed under this Act shall be paid by such person within a period of three months from the date of service of such order failing which recovery proceedings shall be initiated:
    Provided that where the proper officer considers it expedient in the interest of revenue, he may, for reasons to be recorded in writing, require the said taxable person to make such payment within such period less than a period of three months as may be specified by him.

    Priya MadrechaPriya Madrecha
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    78.1. Introduction
    This provision empowers the proper officer to collect any amount which is payable by a taxable person in pursuance of an order passed under the Act
    78.2  Analysis
    (a)    This section enables initiation of proceedings for recovery of amount from taxable person.
    (b)    The amount shall be paid by taxable person within a period of 3 months of the service of order, failing which the proper officer shall initiate the recovery proceedings.
    (c)    If it is in the interest of revenue, the proper officer after recording the reasons in writing, may initiate the recovery proceedings even before the completion of the said period of 3 months However it empowers the proper officer in the interest of revenue after recording the reasons to initiate recovery proceedings even before the said completion of 3 months.
    78.3    Comparative review
    There is no similar provision under present Central Indirect Tax laws.
    78.4    Related provisions
    Section      Description     Remarks
    Section 79     Recovery of tax     Provision for recovering the tax dues from a person
    Section 84     Continuation and validation of certain recovery proceedings     Provisions for continuing the recovery proceedings on a taxable person
    78.5    FAQs
    1.    When shall amount be payable by a taxable person in pursuance of order passed under this Act?
    In normal course, any amount payable by a taxable person in pursuance of an order passed under the Act shall be paid by such person within 3 months from the date of service of such order.
    2.    When can proper officer require the taxable person, to make payment of payable amount within such shorter period as may be specified by him?
    When the proper officer considers it necessary in the interest of revenue, he may, after recording reasons in writing, ask the said taxable person, to make such payment within such shorter period as may be specified by him.
    78.6 MCQ’s
    Q1. When can recovery proceedings be initiated?
    (a)    To recover any amount payable by a taxable person in pursuance of an order passed under the Act
    (b)    To recover any input tax credit availed by taxable person
    (c)    None of the above
    (d)    All of the above
    Ans.  (a) To recover any amount payable by a taxable person in pursuance of an order passed under the Act
    Q2. What is the time limit for recovery of any amount payable by a taxable person in pursuance of an order passed under the Act?
    (a)    6 months
    (b)    3 months
    (c)    1 year
    (d)    2 years Ans. (b) 3 months.
    Q3. When can proper officer require the taxable person, to make payment within shorter period as may be specified?
    (a)    It is necessary in the interest of revenue
    (b)    When amount payable exceeds Rs. 10 Lakhs
    (c)    Both of the above
    (d)    None of the above
    Ans.  (a) It is necessary in interest of revenue

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