Section 79 of GST Act: Recovery of tax

Amended and updated notes on section 79 of CGST Act, 2017. Detail discussion on provisions and rules related to recovery of tax.

Chapter XV (Sections 73–84) of the Central Goods and Services Tax Act, 2017 deals with the provisions related to demands and recovery. Section 79 of CGST 2017 provides for recovery of tax.

Recently, we have discussed in detail section 78 (Initiation of recovery proceedings) of CGST Act 2017. Today, we learn the provisions of section 79 of Central GST Act 2017.

Section 79 of the Central Goods and Services Tax Act, 2017 has been notified by the Ministry of Finance vide Notification No. 9/2017-Central Tax, G.S.R. 658(E), dated 28.06.2017. This notification was come into force from 1st July, 2017 i.e. the commencement date of section 79 is 1-7-2017.

Name of Act	The Central Goods and Services Tax Act 2017
Enacted by	Parliament of India
Administered by	Central Board of Indirect Taxes & Customs
Governing body	GST Council
Number of Chapters	21
Number of Sections	174
You are reading:
Chapter No.	XV
Chapter Name	Demands and Recovery
Section No.	79
Section Name	Recovery of tax
Updated 2024 Edition	GST Law Book PDF

Relevant Rules and Forms for GST Section 79:

• Rule 96A: Export of goods or services under bond or Letter of Undertaking
• Rule 96B: Recovery of refund of unutilised input tax credit or integrated tax paid on export of goods where export proceeds not realized
• Rule 143: Recovery by deduction from any money owed
  • FORM GST DRC – 09: Order for recovery through specified officer under section 79
• Rule 144: Recovery by sale of goods under the control of proper officer
  • FORM GST DRC – 10: Notice for Auction under section 79 (1) (b) or section 129(6) of the Act
  • FORM GST DRC – 11: Notice to successful bidder
  • FORM GST DRC – 12: Sale Certificate
• Rule 144A: Recovery of penalty by sale of goods or conveyance detained or seized in transit
• Rule 145: Recovery from a third person
  • FORM GST DRC – 13: Notice to a third person under section 79(1) (c)     
  • FORM GST DRC – 14: Certificate of Payment to a Third Person
• Rule 146: Recovery through execution of a decree, etc.
  • FORM GST DRC – 15: Application before the Civil Court Requesting Execution for a Decree
• Rule 147: Recovery by sale of movable or immovable property
  • FORM GST DRC – 16: Notice for attachment and sale of immovable/movable goods/shares under section 79         
  • FORM GST DRC – 17: Notice for Auction of Immovable/Movable Property under section 79(1) (d)
• Rule 148: Prohibition against bidding or purchase by officer
• Rule 149: Prohibition against sale on holidays
• Rule 150: Assistance by police
• Rule 151: Attachment of debts and shares, etc.
• Rule 152: Attachment of property in custody of courts or Public Officer
• Rule 153: Attachment of interest in partnership
• Rule 154: Disposal of proceeds of sale of goods or conveyance and movable or immovable property
• Rule 155: Recovery through land revenue authority
  • FORM GST DRC – 18: Certificate action under clause (e) of sub-section (1) section 79
• Rule 156: Recovery through court
  • FORM GST DRC – 19: Application to the Magistrate for Recovery as Fine
• Rule 157: Recovery from surety
  • FORM GST DRC – 20: Application for Deferred Payment/ Payment in Instalments

Section 79 of Central GST – Recovery of tax¹

Section 79 of CGST Act 2017 shall come into force on 01.07.2017 vide Notification No. 9/2017-Central Tax, G.S.R. 658(E), dated 28.06.2017.

Section 79(1) of CGST Act

Section 79(1): Where any amount payable by a person to the Government under any of the provisions of this Act or the rules made thereunder is not paid, the proper officer shall proceed to recover the amount by one or more of the following modes, namely: ––

• (a) the proper officer may deduct or may require any other specified officer to deduct the amount so payable from any money owing to such person which may be under the control of the proper officer or such other specified officer;
• (b) the proper officer may recover or may require any other specified officer to recover the amount so payable by detaining and selling any goods belonging to such person which are under the control of the proper officer or such other specified officer;
• (c) (i) the proper officer may, by a notice in writing, require any other person from whom money is due or may become due to such person or who holds or may subsequently hold money for or on account of such person, to pay to the Government either forthwith upon the money becoming due or being held, or within the time specified in the notice not being before the money becomes due or is held, so much of the money as is sufficient to pay the amount due from such person or the whole of the money when it is equal to or less than that amount;
  • (ii) every person to whom the notice is issued under sub-clause (i) shall be bound to comply with such notice, and in particular, where any such notice is issued to a post office, banking company or an insurer, it shall not be necessary to produce any pass book, deposit receipt, policy or any other document for the purpose of any entry, endorsement or the like being made before payment is made, notwithstanding any rule, practice or requirement to the contrary;
  • (iii) in case the person to whom a notice under sub-clause (i) has been issued, fails to make the payment in pursuance thereof to the Government, he shall be deemed to be a defaulter in respect of the amount specified in the notice and all the consequences of this Act or the rules made thereunder shall follow;
  • (iv) the officer issuing a notice under sub-clause (i) may, at any time, amend or revoke such notice or extend the time for making any payment in pursuance of the notice;
  • (v) any person making any payment in compliance with a notice issued under sub-clause (i) shall be deemed to have made the payment under the authority of the person in default and such payment being credited to the Government shall be deemed to constitute a good and sufficient discharge of the liability of such person to the person in default to the extent of the amount specified in the receipt;
  • (vi) any person discharging any liability to the person in default after service on him of the notice issued under sub-clause (i) shall be personally liable to the Government to the extent of the liability discharged or to the extent of the liability of the person in default for tax, interest and penalty, whichever is less;
  • (vii) where a person on whom a notice is served under sub-clause (i) proves to the satisfaction of the officer issuing the notice that the money demanded or any part thereof was not due to the person in default or that he did not hold any money for or on account of the person in default, at the time the notice was served on him, nor is the money demanded or any part thereof, likely to become due to the said person or be held for or on account of such person, nothing contained in this section shall be deemed to require the person on whom the notice has been served to pay to the Government any such money or part thereof;
• (d) the proper officer may, in accordance with the rules to be made in this behalf, distrain any movable or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid; and in case, any part of the said amount payable or of the cost of the distress or keeping of the property, remains unpaid for a period of thirty days next after any such distress, may cause the said property to be sold and with the proceeds of such sale, may satisfy the amount payable and the costs including cost of sale remaining unpaid and shall render the surplus amount, if any, to such person;
• (e) the proper officer may prepare a certificate signed by him specifying the amount due from such person and send it to the Collector of the district in which such person owns any property or resides or carries on his business or to any officer authorised by the Government and the said Collector or the said officer, on receipt of such certificate, shall proceed to recover from such person the amount specified thereunder as if it were an arrear of land revenue;
• (f) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the proper officer may file an application to the appropriate Magistrate and such Magistrate shall proceed to recover from such person the amount specified thereunder as if it were a fine imposed by him.

Section 79(2) of CGST Act

Section 79(2): Where the terms of any bond or other instrument executed under this Act or any rules or regulations made thereunder provide that any amount due under such instrument may be recovered in the manner laid down in sub-section (1), the amount may, without prejudice to any other mode of recovery, be recovered in accordance with the provisions of that sub-section.

Section 79(3) of CGST Act

Section 79(3): Where any amount of tax, interest or penalty is payable by a person to the Government under any of the provisions of this Act or the rules made thereunder and which remains unpaid, the proper officer of State tax or Union territory tax, during the course of recovery of said tax arrears, may recover the amount from the said person as if it were an arrear of State tax or Union territory tax and credit the amount so recovered to the account of the Government.

Section 79(4) of CGST Act

Section 79(4): Where the amount recovered under sub-section (3) is less than the amount due to the Central Government and State Government, the amount to be credited to the account of the respective Governments shall be in proportion to the amount due to each such Government.

Explanation: For the purposes of this section, the word person shall include “distinct persons” as referred to in sub-section (4) or, as the case may be, sub-section (5) of section 25.

1. Section 79 of CGST Act 2017 shall come into force on 01.07.2017 vide Notification No. 9/2017-Central Tax, G.S.R. 658(E), dated 28.06.2017. ↩︎