RECOVERY PROCEEDINGS AND ITS PROCEDURE UNDER GST ACT

RECOVERY PROCEEDINGS

• The adjudication order passed by proper officer in pursuant to demand SCN is to be treated as recovery notice
• The amount has to be paid within three months or extended period as allowed, from the date of service of such order failing which recovery proceedings shall be initiated.
• The amount payable by a taxable person or any other person on account of tax, interest or penalty which he is liable to pay to the Government shall be a first charge on the property of such taxable person or such person.
• Provisional attachment, including that of Bank account can be ordered to protect revenue in certain cases even during pendency of adjudication and assessment.

Procedure of Recovery     

• Recovery by deduction from any money owed to defaulter by Central or State/UT Government or a local authority or companies owned by them. For this purpose, the proper officer shall issue FORM GST DRC-09
• Goods under the control of proper officer can be sold by auction including e-auction by issuing a notice of 15 days in FORM GST DRC-10. Perishable or hazardous goods can be auctioned immediately. However, if defaulter pays the amount of recovery along with expenses, if any incurred, before notice of auction, the goods will be released to him.
• Recovery can also be made from a third person from whom money is due or may become due to defaulter or who holds or may subsequently hold money for or on account of the defaulter. For this purpose, a notice in FORM GST DRC-13 is to be issued.
• Where any amount is payable to the defaulter in the execution of a decree of a civil court, the Court can be requested to attach decree and credit the amount to Government.
• The due amount can be recovered by sale of movable or immovable property belonging to the defaulter by attaching the same. A copy of attachment order will be sent to the concerned Revenue Authority or Transport Authority or any such Authority to place encumbrance on such property.
• The debts and shares, etc. of defaulter can be attached.
• Property in custody of courts or Public Officer can be attached.
• Attachment of interest in partnership can be resorted to.
• The amount can be recovered as arrear of Land Revenue by sending a certificate to the Collector or Deputy Commissioner of the district in FORM GST DRC-18
• Recovery can be made through court as if default amount is fine imposed by Court under Cr.P.C. For this purpose, an application in FORM GST DRC-19 will be filed before the appropriate Magistrate.
• The amount can be recovered from surety.
• Where the defaulter company is under liquidation, the liquidator will be asked for the recovery of amount in FORMGST DRC-24.
• Where amount is realized from the sale of goods, movable or immovable property, the realized amount will first, be appropriated against the administrative cost of the recovery process; next against the amount to be recovered, next against any other amount under GST law and balance be paid to the defaulter.
• Recovery in instalments
• Commissioner can allow payment with interest by defaulter in monthly installments not exceeding 24 installments.
• In case of default in payment of any one installment on its due date, the whole outstanding balance payable on such date shall become due.
• For seeking installment facility, taxable person can file application electronically in FORM GST DRC-20.
• The installment facility will not be allowed if:-
• The taxable person has already defaulted on the payment of any amount under GST law and recovery process is already undergoing.
• The taxable person has not been allowed to make payment in installments in the preceding financial year under GST law, and the amount for which instalment facility is sought is less than twenty-five thousand rupees.