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Query: ITC Availed & Utilized on Supply from Non-Existent Firms
We had availed and utilized Input Tax Credit (ITC) on supplies made by non-existent firms. Before the issuance of the Show Cause Notice (SCN) under Section 74 of the Act, we voluntarily paid the full tax liability, partial interest, and a penalty at the rate of 15%. Subsequently, the SCN was issued, to which we duly furnished our reply.
Following this, a DRC-07 order has been issued, demanding interest under Section 50 and imposing a penalty equal to 100% of the tax amount. However, if the penalty is paid within 30 days of receiving the order, it is reduced to 50% of the tax amount.
Our query:
1. Penalty Liability: Since we had already made a voluntary payment of penalty at 15% before the issuance of the SCN, are we still liable to pay an additional penalty of 50% of the tax amount as per the DRC-07 order? Or is our earlier payment sufficient to discharge the penalty liability?
Kindly provide clarification on the above aspects.
Query: ITC Availed & Utilized on Supply from Non-Existent Firms
We had availed and utilized Input Tax Credit (ITC) on supplies made by non-existent firms. Before the issuance of the Show Cause Notice (SCN) under Section 74 of the Act, we voluntarily paid the full tax liability, partial interest, and a penalty at the rate of 15%. Subsequently, the SCN was issued, to which we duly furnished our reply.
Following this, a DRC-07 order has been issued, demanding interest under Section 50 and imposing a penalty equal to 100% of the tax amount. However, if the penalty is paid within 30 days of receiving the order, it is reduced to 50% of the tax amount.
Our query:
1. Penalty Liability: Since we had already made a voluntary payment of penalty at 15% before the issuance of the SCN, are we still liable to pay an additional penalty of 50% of the tax amount as per the DRC-07 order? Or is our earlier payment sufficient to discharge the penalty liability?
Kindly provide clarification on the above aspects.
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