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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Procedural Compliance under GST

A notice of demand for tax, interest and penalty was served on a registered person, who then filed an appeal. In the appeal, the Government dues are reduced. Under Section 84 of the CGST Act, 2017, what must the Commissioner do?

The Commissioner need not serve a fresh notice of demand. He must intimate the reduction to the taxable person and to the authority with whom recovery is pending, and recovery continues for the reduced amount from the stage it had reached before the appeal was decided.

  1. AServe a fresh notice of demand for the reduced amount and drop the earlier recovery proceedings
  2. BGive intimation of the reduction to the person and to the authority with whom recovery is pending, without serving a fresh noticeCorrect
  3. CWithdraw all recovery proceedings and start them again after the appeal order is accepted
  4. DServe a fresh notice of demand only if the reduction exceeds half of the original dues

Explanation

Under Section 84(b), when dues are reduced in appeal, revision or other proceedings, no fresh notice of demand is needed. The Commissioner gives intimation of the reduction to the person and to the appropriate authority with whom recovery is pending. Recovery then continues for the reduced amount from the stage reached. Serving a fresh notice is therefore not required.

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