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CMA Intermediate · Direct and Indirect Taxation · Charge of Tax including Reverse Charge

Ravi Traders Pvt Ltd owes GST of Rs 8,00,000, interest of Rs 1,00,000 and penalty of Rs 50,000 to the Government. Under Section 82, the first charge on its property extends to which amount?

The first charge covers Rs 9,50,000. Section 82 attaches to any amount payable as tax, interest or penalty, so all three components are added: 8,00,000 plus 1,00,000 plus 50,000.

  1. ARs 8,00,000, being tax only
  2. BRs 9,00,000, being tax and interest only
  3. CRs 8,50,000, being tax and penalty only
  4. DRs 9,50,000, being tax, interest and penaltyCorrect

Explanation

Section 82 covers any amount payable on account of tax, interest or penalty. So 8,00,000 + 1,00,000 + 50,000 = Rs 9,50,000. Options limited to tax alone or leaving out one component omit part of what the section covers.

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