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CA Final · Indirect Tax Laws · Demands and Recovery

Mahalaxmi Pharma Ltd. is under liquidation as contemplated in section 88 of the CGST Act. The department wants to recover tax and interest due from the company. According to the CGST Rules, what must the Commissioner do?

The Commissioner must notify the liquidator of the company for recovery of the tax, interest, penalty or other amount due, using FORM GST DRC-24. This is the prescribed procedure for a company in liquidation under section 88. The DRC-07A route relates to existing-law dues.

  1. ANotify the liquidator for recovery of the amount due in FORM GST DRC-24Correct
  2. BAttach the personal property of the directors directly without notifying anyone
  3. CUpload a summary of the demand in FORM GST DRC-07A on the common portal
  4. DIssue a fresh show cause notice to the company in FORM GST DRC-01

Explanation

The rule on recovery from a company in liquidation says the Commissioner shall notify the liquidator for recovery of tax, interest, penalty or other amount due in FORM GST DRC-24. FORM GST DRC-07A relates to summaries of orders under existing laws. Hence the DRC-07A option is wrong.

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