Issuance of Demand and Recovery of Tax under GST

What are Demand and Recovery under GST?:

Demand is the desire of a buyer to obtain goods or services. When the demand for goods is higher in the market, it will thrive immensely. It is an activity that helps in leading the growth of the economy.

Furthermore, the government imposes a tax on every good and service available to the consumer with some exceptions specified thereof. Every buyer or consumer is accountable to pay the tax imposed on the goods or services consumed by them, to the government. In the case where the person liable to pay tax fails the obligation, the government is to recover that tax from the defaulter.

The government resources are generated from acquiring taxes, it is the source to run the economy of the country, failing which will cause economic imbalances. Hence why the government takes strict actions to recover the taxes from the defaulters.

Issuance of Demand Notice:

Notice of Demand is a notice which is issued by the appropriate Authorities under Goods and Services Tax (GST) to the Taxpayers failing to fulfil their obligations to pay tax accurately.

When do the Authorities raise the demand?

As it is known that Goods and Services Tax (GST) is a tax paid on the basis of self-assessment. If the tax is paid by the assessee/taxpayer on due time and correctly in the context of the amount due then no problem will arise for that matter. But in the case where there is any shortcoming of payment or the inaccurate utilization of Input Tax credit (ITC), then the appropriate authorities under GST Act will issue a notice regarding the demand and recovery against the assessee or taxpayer. The provisions under the GST Act regarding demand and recovery are similar to the provisions of the previously imposed Service Tax and central excise Laws.

Time Limit for the order:

The Appropriate Authority must issue the show cause notice 3 months prior to the time limitation. The time limit for the order of payment only extends 3 years from the due date for filing of annual return for the year in which the amount was due or paid incorrectly.