Bimal Jain
Background
The Hon’ble Finance Minister, in Union Budget 2021-22, proposed changes vide the Finance Bill, 2021, that amends the Central Goods and Services Tax Act, 2017 ("the CGST Act") with respect to recovery of self-assessed tax. Accordingly, amended Bill was passed in Rajya Sabha, the upper house, and it received presidential assent vide Finance Act, 2021.
Relevant provisions
The CBIC vide Notification No. 39/2021- Central Tax dated December 21, 2021 notified the below-mentioned amendments made vide Section 114 of the Finance Act, 2021 w.e.f. January 01, 2022:
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Insertion of New Explanation in Section 75(12) - General provisions relating to the determination of tax - Section 114 of the Finance Act, 2021 |
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Current provisions |
Notified provisions |
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(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. |
In Section 75(12), the following Explanation shall be inserted: "Explanation.- For the purposes of this sub-section, the expression "self-assessed tax" shall include the tax payable in respect of details of outward supplies furnished under section 37, but not included in the return furnished under section 39." |
Our comments
Recovery of self-assessed tax
An explanation has been inserted to Section 75(12) of the CGST Act to clarify that "self-assessed tax" shall include the tax payable in respect of outward supplies, the details of which have been furnished in Form GSTR-1 under Section 37 of the CGST Act, but not included in the return furnished in Form GSTR-3B under Section 39 of the CGST Act.
The ambit of the term "self-assessed tax" is proposed to be widened. Meaning thereby that now recovery can be initiated by the officer even for the outward supply liability shown in the GSTR-1 filled under Section 37 of the CGST Act.
But it is to be noted that Section 75(12) of the CGST Act starts with the non-obstante clause that " Notwithstanding anything contained in section 73 or section 74… ."
Thus, an exceptional view can be given to the said amendment that, the recovery proceedings, in respect of ‘self-assessed tax’ on outward supplies which have been declared in Form GSTR-1 but not included in Form GSTR-3B, can be initiated straightaway under Section 79 (i.e. through various modes like detaining/selling goods belonging to defaulter which are under control of the department, garnishee proceedings, distaining and selling of movable or immovable property belonging to the defaulting person, etc.) without even resorting to proceedings under Section 73 or Section 74 of the CGST Act.
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