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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Assessment, Audit, Scrutiny, Demand and Recovery, Advance Ruling, Appeals and Revision

A demand of Rs 10,00,000 was served on a taxable person and recovery proceedings began. On revision, the dues are reduced to Rs 6,00,000. Under section 84 of the CGST Act, what must the Commissioner do?

On reduction of dues, no fresh demand notice is required. The Commissioner intimates the reduction to the taxable person and to the authority handling recovery, and recovery continues on the reduced Rs 6,00,000 from the stage it had reached.

  1. AServe a fresh notice of demand for Rs 6,00,000 and drop the earlier recovery proceedings
  2. BGive intimation of the reduction to the person and to the authority with whom recovery is pending, and recovery continues on the reduced amountCorrect
  3. CDo nothing, since recovery continues on the full Rs 10,00,000 until the person claims a refund
  4. DServe a notice of demand for Rs 4,00,000 as the amount of reduction

Explanation

Under section 84(b), no fresh notice of demand is needed on reduction. The Commissioner intimates the reduction to the person and to the appropriate recovery authority, and recovery continues on the reduced amount (Rs 6,00,000) from the stage reached. A fresh notice is therefore wrong.

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