Section 82 of CGST Act, 2017 : Section 82: Tax To Be First Charge On Property

Explanation using Example

Imagine a company, ABC Ltd., which owes a significant amount of Goods and Services Tax (GST) to the government, including interest and penalties. Despite various recovery efforts, the company fails to pay its dues. Meanwhile, ABC Ltd. also has debts to other creditors, such as banks and suppliers. According to Section 82 of The Central Goods and Services Tax Act, 2017, when the company's assets are being liquidated to pay off its debts, the government's claim for the unpaid GST, interest, and penalties takes precedence over other debts. This means that before any other creditor can claim the proceeds from the sale of ABC Ltd.'s assets, the government's GST dues must be cleared first. This provision ensures that tax dues to the government are given priority over other debts, except in cases governed by the Insolvency and Bankruptcy Code, 2016.