Section 13 of UTGST Act 2017: Recovery of Tax

Provisions under Section 13 of the Union Territory Goods and Services Tax (UTGST) Act, 2017 relating to “Recovery of Tax”, are as under:

Section 13 of UTGST Act 2017: Recovery of Tax (CHAPTER VI – DEMAND AND RECOVERY)

(1) 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 central 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 central tax and credit the amount so recovered to the account of the Government under the appropriate head of Union terrirtory tax.

(2) Where the amount recovered under sub-section (1) is less than the amount due to the Government under this Act and the Central Goods and Services Tax Act, the amount to be credited to the account of the Government shall be in proportion to the amount due as Union territory tax and central tax.

Amendments History:

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Commentary on Section 13 of UTGST Act, 2017

Section 13 of the Union Territory Goods and Services Tax (UTGST) Act, 2017, focuses on the “Recovery of Tax.” It details the methods and procedures for recovering unpaid tax, interest or penalty by a person to the Government under the provisions of this Act or any rules made under it. This section can be broken down into two subsections:

Section 13(1) of UTGST Act, 2017: Recovery of unpaid tax, interest or penalty

This subsection explains that if a person owes any amount in tax, interest or penalty to the Government under the UTGST Act, 2017, or its associated rules, and fails to pay, the proper officer of central tax is authorized to recover the unpaid amount. The recovery process should treat the unpaid amount as if it were an arrear (overdue debt) of central tax. The amount recovered will then be credited to the account of the Government under the appropriate head of Union Territory tax.

In simpler terms, this subsection empowers the proper officer of central tax to recover unpaid tax, interest or penalty as if it were an overdue debt of central tax and credit it to the Government’s account as Union Territory tax.

Section 13(2) of UTGST Act, 2017: Proportional crediting of the recovered amount

If the amount recovered as per Subsection (1) is less than the total amount due to the Government under both the UTGST Act and the Central Goods and Services Tax (CGST) Act, this subsection states that the recovered amount should be credited proportionally to the Government’s account as Union Territory tax and central tax.

In other words, if the recovered amount is not sufficient to cover the entire tax debt, the available funds will be allocated proportionally between Union Territory tax and central tax.

In summary, Section 13 of the UTGST Act, 2017, outlines the process for recovering unpaid tax, interest or penalty and the proportional allocation of the recovered amount between Union Territory tax and central tax, depending on the circumstances.

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Note: The UTGST Act 2017 has been notified vide GOI Notification dated 12/04/2017, which has subsequently been amended  through UTGST (Amendment) Act 2018, Finance Act 2019, Finance Act 2020, Finance Act 2021, Finance Act, 2022 and Finance Act, 2023 including various Notifications issued by the Govt./ CBIC from time to time, relating to the commencement dates of various Sections/ Provisions in the respective UTGST/ Amendment Acts, wherever required. Information on this page is a Section-wise compilation of the Amendments made by various Notifications issued by CBIC from time to time, with best possible efforts for accuracy. In any case, E&OE. For official/ updated information, please visit CBIC website.