There are some rules which have been implemented to determine the tax liability so that the penalty calculation can be done under the demand provision of the GST. These provisions ensure that there is no scenario in which a person or organization can escape from paying the GST.

Some of the demand provisions are listed below.

Provisions for Tax Liability Determination

• General Provisions – If the SCN or issue of the order has been made to stay by order of the court then the stay period will not include the maximum time specified. If the fraud charges are not sustainable, then the SCN will be assumed to be of a non-fraud case and accordingly, the tax liability will be calculated. If the taxpayer, however, requests in writing then a person hearing will be granted to them. While an order is issuing the relevant facts should be set out in the order. If a penalty gets imposed under these demand provisions, then no other penalty from any of the sections of the GST will be applicable anymore.
• Provisions for Tax Collected but Unpaid – If a person collects tax from other people but does not deposit it to the government then the defaulter will be mandatorily made to pay the required amount irrespective of the fact that the supplies are non-taxable or taxable. If the time limit is crossed an SCN will be issued then the tax along with a penalty had to be paid by that person, and finally, an order can be issued in a year from ten SCN issues after which the amount will get collected and adjusted.
• Provisions for wrongfully Collected Tax – If someone has wrongfully paid CGST+SGST/UTGST in place of IGST then the amount will be refunded and subjected to some specified conditions under which he has to pay. For vice versa, no amount of interest is required to be paid.

Thus tax liability under demand provisions can be determined like this; however, with the right software like Tally ERP 9, there is going to be no mistake.