Offences with Fine and penalty under GST
Hi Reader! In this article we read about the various types of offences with Fine and penalty under GST. Chapter 19 of CGST Act talks about offences and penalties under the GST law. The chapter covers section from 122 to section 138 detailing about all the offences and their respective penalties in the law.
Section 122 sub section (1) laid down 21 kind of offences in the law, which are categorized as follows: –
Invoice related offences
1. Supplies any goods or services without issue of invoices or false issue of invoices.
2. Issue of invoices or bills without any supply of Goods or Services.
3. Issue of invoice or document using GSTIN of a different GST registered person/entity.
Tax payment related offences
4. Tax Collected but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due.
5. Tax Collected in contravention of the provisions of Law but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due.
6. Suppresses his turnover for the purpose of evasion of tax.
7. Falsification of documents with intention of tax evasion
TDS/TCS related offences
8. Fails to deduct or deduct less amount of TDS as per Section 51(1) or fail to pay TDS to the Government under Section 51(2).
9. Fails to collect or collect less amount of TCS as per Section 52(2) or fail to pay TCS to the Government under Section 52(3).
ITC related offences
10. Takes or utilizes ITC without actual receipt of goods or services either fully or partially.
11. Takes or distributes ITC in contravention of section 20 or the rules made there under.
ITC Refund related offences
12. GST refund fraudulently obtains under this Act.
Registration related offences
13. Does not obtain GST registration when he is liable to be registered under the Law.
14. Providing false information regarding registration, either at the time of applying for registration or subsequently.
Documents related offences
15. Does not maintain or retain books of account and other documents in accordance with the provisions of this Act or the rules made there under.
16. Does not furnish information or documents called for by an officer or furnishes false information or documents during any proceedings under this act.
17. Transport of taxable goods without adequate/correct documentation
Other offences
18. Tamper or destroy any material evidence or document.
19. Dispose off or tamper with any goods that have been detained, seized, or attached under this Act,
20. Obstructs or prevents any officer in discharge of his duties under this Act.
21. Supplies, transports, or stores any goods which he has reasons to believe are liable to confiscation under this Act.
Read more – Offences with Fine and penalty under GST
Section 122(1A) – Penalty of certain offence
Any person who are the beneficiary of following transaction or whose instance such transaction is conducted, shall be liable to a penalty of an amount equivalent to the tax evaded.
A. Supplies any goods or services without issue of invoices or false issue of invoices.
B. Issue of invoices or bills without any supply of Goods or Services.
C. Takes or utilizes ITC without actual receipt of goods or services either fully or partially.
D. Takes or distributes ITC in contravention ISD provisions.
Section 122 (2) – This Section specified the quantum of penalty in respect of following offence.
A. Tax has not been paid or short paid
B. Erroneously GST refunded
C. ITC wrongly availed or utilized
If the above offence is for reason of fraud or any willful misstatement or suppression of facts to evade tax, then penalty shall be liable of Rs 10,000 or tax due from such person whichever is higher.
If the above offence is for reason of other than fraud or any willful misstatement or suppression of facts to evade tax, then penalty shall be liable of Rs 10,000 or 10% of tax due from such person whichever is higher.
Section 122 (3) –Any person (registered or unregistered) who commit following offence shall be liable to a penalty which may extend to INR 25,000.
A. Aids or abets any of 21 offence specified under section 122(1).
B. Acquires possession of any goods which he knows or has reasons to believe are liable to confiscation under the Act or the rules made thereunder
C. Receives any supply of services which he knows or has reason to believe are in contravention under the Act or the rules made thereunder.
D. Fails to issue invoices as per law or rules made thereunder.
E. Fails to account an invoice in his book of account.
F. Fails to appear before tax authorities after receiving summons.
Section 123 – Penalty for failure to submit information or return
If a person does not furnish Information or Return under section 150 within time limit specified in notice issued under section 123(3) then penalty Rs 100 for every day shall be liable until the default continues. However, the maximum amount of penalty can’t exceed Rs. 5,000.
Section 124 – Penalty for failure to furnish statistics
In case person fails to furnish any information or return under section 151, he shall be punishable with a fine which may extend to Rs 10,000 and in case of a continuing offence to a further fine which may extend to Rs 100 per day after the first day during which the offence continues subject to a maximum limit of 25,000.
Read more – Offences with Fine and penalty under GST
Section 125 – Residual Penalty
CGST Act through section 125 imposed penalty which may extend to Rs 25,000 to any person, who contravenes any of the provisions of this Act or any rules made there under for which no penalty is separately provided in Law.
Section 126 – General disciplines related with Penalty
A. Penalty shall not be imposed for minor breaches of tax regulations or procedural requirements. Penalty shall not also be imposed on any omission or mistake in documentation which is easily rectifiable. Breaches should be in nature other than fraudulent intent or gross negligence. Cases where tax invoice is less than Rs 5000 shall be considered as minor breaches.
B. Penalty shall be imposed depend on the facts and circumstances of each case.
C. No Penalty without giving show cause notice and without giving him an opportunity of being heard.
D. Penalty order must clearly specify the breach.
E. In case person voluntarily discloses a breach prior to the discovery of the breach by the tax authorities the proper officer may consider this fact as a mitigating factor when quantifying a penalty
F. In case penalty specified under this act is either a fixed sum or expressed as a fixed percentage then this section shall not apply.
Section 127–Impose penalty in certain cases
Section 127 gives power to the proper officer to levy penalty for the offence not covered under any proceedings under the following provisions:-
A. Section 62 – Assessment of non filers of return
B. Section 63 – Assessment of unregistered persons.
C. Section 64 – Summary Assessment.
D. Section 73 – Tax short paid or less paid or erroneously refunded or ITC wrong availment or utilisation of ITC for reason other than fraud or willful misstatement or suppression of facts.
E. Section 74 – Tax short / less paid or Tax erroneously refunded or wrong availment of Input tax Credit or utilisation of Input tax credit by reason of fraud or willful misstatement or suppression of facts.
F. Section 129 – Detention, Seizure and release of goods and conveyance in transit.
G. Section 130 – Confiscation of goods or conveyance.
Section 128 – Waiver of Penalty
GST law gives power to the Government through section 128 to, waive in part or full, any penalty referred to in section 122 or section 123 or section 125 or any late fee referred to in section 47 on the recommendations of the Council.
Budget 2023
Decriminalization of certain offences and increase in monetary limit for initiating prosecution proceedings: It is proposed to amend section 132 (1) of CGST Act, to increase the monetary threshold limit from 1 crore to 2 crores for launching prosecution for the offences under the said Act, except for offences related to issuance of invoices without supply of goods or services or both.
Reduction in compounding fees: It is proposed to reduce the compounding from minimum – Rs. 10,000 or 50% of tax involved whichever is higher (present) to 25% of tax involve (proposed) and maximum – Rs. 30,000 or 150% of tax involved whichever is higher (present) to 100% of tax involve (proposed).
Also See, “Job work provision under GST
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