Section 13 of UTGST Act, 2017 - Recovery of Tax
Section 13 of the Union Territory Goods and Services Tax Act, 2017 (UTGST Act) deals with recovery of unpaid Union Territory GST, interest and penalties. It enables a proper officer of central tax to recover UTGST arrears during central-tax recovery proceedings and sets out how insufficient recoveries are allocated.
Section 13 - Statutory text
Sub-section (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 territory tax.
Sub-section (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.
Meaning and scope of Section 13
Section 13(1): Recovery of outstanding UTGST dues
Where UTGST, interest or a penalty payable under the UTGST Act or its rules remains unpaid, the proper officer of central tax may recover that outstanding amount in the course of recovery of tax arrears as though it were an arrear of central tax. The UTGST amount recovered must be credited under the appropriate Union territory tax head. The provision facilitates coordinated recovery; it does not convert the UTGST liability into CGST or authorise crediting UTGST collections to the central-tax head.
Section 13(2): Proportional credit when recovery is insufficient
If the recovered amount is insufficient to discharge both the outstanding UTGST and CGST amounts, the Government must credit the recovery proportionately according to the respective amounts due. For illustration, if the relevant UTGST and CGST dues are Rs. 40,000 and Rs. 60,000 and only Rs. 25,000 is recovered, a 40:60 allocation would credit Rs. 10,000 towards UTGST and Rs. 15,000 towards CGST, assuming those are the respective dues for the statutory calculation.
Important definitions and related legal provisions
Proper officer: Under Section 2 of the UTGST Act, the expression is read with the definition and assignment of functions under the applicable GST provisions. Officer authorisation and powers should also be read with Section 6 of the UTGST Act.
Tax, interest and penalty: These are distinct statutory dues. Section 13 expressly covers each where payable under the UTGST Act or rules and remaining unpaid; the validity and amount of each liability depend on the applicable assessment, demand and payment provisions.
Recovery machinery: Section 21 of the UTGST Act applies specified CGST Act provisions, including demands and recovery, to UTGST with necessary modifications. Sections 78 and 79 of the CGST Act address initiation and modes of recovery, subject to applicable statutory requirements.
How recovery generally operates
The officer must first identify a legally payable, outstanding liability. Applicable notice, adjudication, payment-period and recovery safeguards under the GST framework continue to matter. Where recovery proceeds under the central-tax machinery, the UTGST portion is accounted for under the appropriate UTGST head. If both tax heads remain due and the amount recovered is inadequate, Section 13(2) governs the proportional credit.
Important: Section 13 is a recovery and accounting provision. It does not by itself create a new tax liability or dispense with procedural safeguards otherwise required under the CGST Act as applied to UTGST.
Official legislation and updates
Refer to the Union Territory Goods and Services Tax Act, 2017 (India Code), the India Code legislation database, CBIC GST portal and CBIC Tax Information Portal for the operative legislation, amendments, rules, notifications and clarifications. Always check the applicable text and effective dates when dealing with a specific demand or recovery.