Ranjan Enterprises is entitled for exemption from tax under GST law. However, it collected tax from its buyers worth ₹ 70,000 in the month of May, 2025. It has not deposited the said amount collected as GST with the Gove

As per the provision of 76 of CGST Act, 2017, it is mandatory to pay amount, collected from other person representing tax under GST law, to the Government. Every person who has collected from any other person any amount as representing the tax under GST law, and has not paid the said amount to the Government, shall forthwith pay the said amount to the Government, irrespective of whether the supplies in respect of which such amount was collected are taxable or not. For any such amount not so paid, proper officer may issue show Cause Notice (SCN) for recovery of such amount and penalty equivalent to amount specified in notice. The proper officer shall, after considering the representation, if any, made by the person on whom SCN is served, determine the amount due from such person and thereupon such person shall pay the amount so determined along with interest at the rate specified under section 50 of CGST Act, 2017 from the date such amount was collected by him to the date such amount is paid by him to the Government.