2026-VIL-283-GSTAT-BLR
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SGST Tribunal

GST - Applicability of Section 76 of the CGST Act, 2017 to a registered person who collected tax under valid invoices but did not remit it to the Government – Respondent-assessee supplied taxable services to the Railways, collected GST under valid invoices, short-declared turnover in GSTR-3B and failed to file returns thereafter, thereby withholding the tax collected - Adjudicating Authority confirmed the tax, interest and penalty under Section 76. The FAA upheld the tax and interest but set aside the penalty on the premise that Section 76 applies only to collections made without authority of law - Whether Section 76 applies to a registered person who collected tax under valid invoices and withheld it - HELD - Section 76(1) mandates that every person who has collected any amount as representing the tax and has not paid it to the Government shall forthwith pay it, irrespective of whether the supplies in respect of which the amount was collected are taxable or not. The expression ‘any amount’ and ‘every person’ is of the widest amplitude and draws no distinction between registered and unregistered persons. The provision does not condition its operation on the collection being unauthorised, and a contrary view would create an anomalous immunity for registered defaulters - The foundational contention of the Respondent that Section 76 applies only to unauthorized collections by unregistered persons or amounts collected without legal authority, is fundamentally flawed - A person collecting tax holds it in a fiduciary capacity for the Government, and retaining it while filing suppressed or nil returns is a breach of that trust - The finding of the FAA that Section 76 excludes registered suppliers is unsustainable and the penalty under Section 76 is restored - The appeal by the Department is allowed
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