Offences and Penalties Under GST

21
OFFENCES AND
PENALTIES
LEARNING OUTCOMES
After studying this Chapter, you will be able to –
 understand and explain what will constitute the offence and the quantum of
penalty for different types of offences in different circumstances.
 identify and appreciate general disciplines to be followed for imposing penalty.
 analyse and apply the circumstances in which penalty may be waived.
 examine the circumstances in which detention, seizure and release of goods
and conveyances in transit may be initiated.
 comprehend the circumstances in which confiscation of goods or conveyances
and levy of penalty may be initiated.
 list offences for enforcing prosecution provisions.
 categorize the offences within cognizable and non-bailable and non-
cognizable and bailable offences.
 understand and describe the meaning of ‘culpable mental state’ and its
significance in enforcing prosecution provisions.
 identify the person who is liable in case of offences by Companies.
 analyse and apply the offences that may be compounded and provisions
relating thereto.
© The Institute of Chartered Accountants of India

21.2 GOODS AND SERVICES TAX
1. INTRODUCTION
What is penalty and

prosecution?
Penal provisions are important aspect of any law to implement the law
effectively and to encourage genuine taxpayers to make the compliances. In
the GST regime, there is uniform penalty and prosecution provision for similar
type of offence that may be committed by a registered person, depending
upon its severity.
The word “penalty” has not been defined in the CGST Act but judicial
pronouncements and principles of jurisprudence have laid down the nature of
a penalty as:
• a temporary punishment or a sum of
money imposed by statute, to be
PENALTIES AND
paid as punishment for the PROSECUTION
commission of a certain offence;
• a punishment imposed by law or contract for doing or failing to do
something that was the duty of a party to do.
‘Prosecution’ is the institution or commencement of legal proceeding; the
process of exhibiting formal charges against the offender. Section 198 of the
Criminal Procedure Code defines “prosecution” as the institution and carrying
on of the legal proceedings against a person.
However, the amount of penalty to be levied will depend upon intention of
person committing the offence. A person with fraudulent intention to evade
payment of taxes will be subjected to higher amount of taxes whereas a
relatively less amount of penalty will be levied for non-fraudulent offences.
Likewise, to institute the prosecution, offences will be classified into
Cognizable (serious category of offences) and non-cognizable offences
(relatively less serious category of offences). Whereas former will be non-
bailable, latter will be bailable offence.

OFFENCES AND PENALTIES 21.3
Chapter XIX – Offences and Penalties [Sections 122 to 138] of the CGST Act
stipulates the provisions relating to offences and penalties. State GST laws also
prescribe identical provisions in relation to offences and penalties.
Provisions of offences and penalties under CGST Act have also been made
applicable to IGST Act vide section 20 of the IGST Act.
Further, in cases where the penalty is leviable under the CGST Act and the SGST
Act/ UTGST Act, the penalty leviable under the IGST Act shall be the sum total
of the said penalties.
It may be noted that the penalties 1 payable by a registered person for the
specified offences are with reference to the CGST Act only. An equal amount of
penalty would be payable by such person under the respective SGST/ UTGST
Act as well.
However, before proceeding to understand the provisions, let us first go

through few relevant definitions.
2. RELEVANT DEFINITIONS
Definitions
 Conveyance includes a vessel, an aircraft and a vehicle; [Section 2(34)].

 Registered Person means a person who is registered under section 25 but
does not include a person having a Unique Identity Number. [Section 2(94)]
 Regulations means the regulations made by the Board under this Act on
the recommendations of the Council. [Section 2(95)]
 Proper Officer in relation to any function to be performed under this Act,
means the Commissioner or the officer of the central tax who is assigned
that function by the Commissioner in the Board; [Section 2(91)]
 Confiscation: The word ‘confiscation’ has not been defined in the Act.
The concept is derived from Roman law wherein it meant seizing or
taking into the hands of emperor, and transferring to imperial “fiscus” or
1 As discussed in this chapter

treasury. The word “confiscate” has been defined in Aiyar’s Law Lexicon
as to “appropriate (private property) to the public treasury by way of
penalty; to deprive of property as forfeited to the State.”
In short it means transfer of the title in goods to the Government.
3. PENALTY FOR CERTAIN OFFENCES [SECTION

122]
As per the provisions of sub-section (1) of section 122, there are 21 offences,
for which a taxable person may be held liable to penalty. The list of said
offences is as under:
(i) Supply of any goods or services or both without issue of any invoice or
issue of an incorrect or false invoice with regard to any such supply.
The essence of GST law is documentation and reporting. The law
prescribes that in case of supply of goods, invoice needs to be raised
before or at the time of removal of goods, and within 30 days in case of
supply of services. Any transaction without an invoice or invoice with
incorrect particulars will fall under this category.
(ii) Issue of any invoice or bill without supply of
goods or services or both in violation of the
provisions of this Act or the rules made
thereunder.
This might be a case where the invoices are raised
for a non-existent transaction (Bogus invoices).
(iii) Collects any amount as tax but fails to pay the
same to the Government beyond a period of three
months from the date on which such payment becomes due.
(iv) Collects any tax in contravention of the provisions of this Act but fails to
pay the same to the Government beyond a period of three months from
the date on which such payment becomes due.
Any money collected as tax even if it is not as per the provisions of the
Act is to be remitted to the Government. For example, where tax at the
rate 18% is incorrectly collected instead of 12%, the entire amount
collected is to be remitted to the Government.

(v) Fails to deduct the tax in accordance with the provisions of sub-section
(1) of section 51, or deducts an amount which is less than the amount
required to be deducted under the said sub-section, or where he fails to
pay to the Government under sub-section (2) thereof, the amount
deducted as tax.
(vi) Fails to collect tax in accordance with the provisions of sub-section (1) of
section 52, or collects an amount which is less than the amount required
to be collected under the said sub-section or where he fails to pay to the
Government the amount collected as tax under sub-section (3) of
section 52.
(vii) Takes or utilises input tax credit without actual receipt of goods or
services or both either fully or partially, in contravention of the
provisions of this Act or the rules made thereunder.
This clause covers the situation where the invoice is received in advance
and the goods have not been received/ partially received. The registered
person cannot avail the input without receipt of goods/ partial receipt of
goods in terms of section 16 of the CGST Act.
(viii) Fraudulently obtains refund of tax under this Act.
Refunds are largely meant for exports and supplies to SEZ’s, this clause
covers scenario where false documents are submitted to get refund.
(ix) Takes or distributes input tax credit in contravention of section 20, or the
rules made thereunder.
Section 20 prescribes the manner in which the credit is distributed by an
Input Service Distributor. Availing or distributing credit in contravention
of the provisions of the Act shall attract penalty.
(x) Falsifies or substitutes financial records or produces fake accounts or
documents or furnishes any false information or return with an intention
to evade payment of tax due under this Act.
(xi) Is liable to be registered under this Act but fails to obtain registration.
This deals with the situation where a person who is compulsorily required
to take registration under section 24 or crosses the threshold but fails to
take registration.
(xii) Furnishes any false information with regard to registration particulars,
either at the time of applying for registration, or subsequently.

This shall cover submitting of incorrect information or concealing of

information regarding the place of business, nature of business, details
of authorized signatories, bank account details etc.
(xiii) Obstructs or prevents any officer in discharge of his duties under this Act.
Officers covered under this Act shall not be obstructed from performing the
duties like inspection of records, stock etc.
(xiv) Transports any taxable goods without the cover of documents as may be
specified in this behalf.
Any goods transported should have the requisite documents prescribed
like tax invoice/ bill of supply, E-way bill (wherever required) etc.
(xv) Suppresses his turnover leading to evasion of tax under this Act.
Suppression means non-disclosure or under-reporting of transactions
leading to evasion of tax.
(xvi) Fails to keep, maintain or retain books of account and other documents
in accordance with the provisions of this Act or the rules made
thereunder.
(xvii) Fails to furnish information or documents called for by an officer in
accordance with the provisions of this Act or the rules made thereunder
or furnishes false information or documents during any proceedings
under this Act;
(xviii) Supplies, transports or stores any goods which he has reasons to believe
are liable to confiscation under this Act;
(xix) Issues any invoice or document by using the registration number of
another registered person;
(xx) Tampers with, or destroys any material evidence or document;
(xxi) Disposes off or tampers with any goods that have been detained, seized,
or attached under this Act,
Amount of Penalty
(a) ` 10,000/-; or
(b) An amount equivalent to, any of the following (applicable as the case may be) –
(i) Tax evaded; or

(ii) Tax not deducted under section 51 or short deducted or deducted

but not paid to the Government; or
(iii) Tax not collected under section 52 or short collected or collected
but not paid to the Government; or
(iv) Input tax credit availed of or passed on or distributed irregularly; or
(v) Refund claimed fraudulently
whichever is higher.
Any person who retains the benefit of a transaction covered under clauses
(i), (ii), (vii) or clause (ix) of sub-section (1) and at whose instance such
transaction is conducted, shall be liable to a penalty of an amount
equivalent to the tax evaded or input tax credit availed of or passed on.
[Section 122(1A)]
The scope of penal provision has been expanded to include a person
who causes to commit and retains the benefits arising out of any of
the following offences:-
(i) Supply of any goods or services or both without issue of any
invoice or issue of an incorrect or false invoice with regard to
any such supply.
(ii) Issue of any invoice or bill without supply of goods or services
or both in violation of the provisions of this Act or the rules
made thereunder.
(vii) Takes or utilises input tax credit without actual receipt of goods
or services or both either fully or partially, in contravention of
the provisions of this Act or the rules made thereunder.
(ix) Takes or distributes input tax credit in contravention of section 20,
or the rules made thereunder.
As per the provisions of sub-section (2) of section 122, any registered person –
(i) who supplies any goods or services or both on which any tax has
not been paid or short-paid or erroneously refunded, or
(ii) where the input tax credit has been wrongly availed or utilised,

Amount of Penalty
(a) For any reason, Shall be liable to a penalty for

other than the an amount equal to–
reason of fraud or (a) ` 10,000/-; or
any wilful (b) 10% of the tax due from
misstatement or such person
suppression of facts
Whichever is higher
to evade tax
(b) For reason of fraud Shall be liable to a penalty for

or any wilful an amount equal to–
misstatement or (a) ` 10,000/-; or
suppression of facts (b) Tax due from such person
to evade tax
Whichever is higher
As per the provisions of sub-section (3) of section 122, penalty is leviable

for any of the following offences committed by a person who –
(a) aids or abets any of the 21 offences specified in sub-section (1) of
section 122;
(b) acquires possession of, or in any way concerns himself in
transporting, removing, depositing, keeping, concealing, supplying,
or purchasing or in any other manner deals with any goods which
he knows or has reasons to believe are liable to confiscation under
this Act or the rules made thereunder;
(c) receives or is in any way concerned with the supply of, or in any
other manner deals with any supply of services which he knows or
has reasons to believe are in contravention of any provisions of this
Act or the rules made thereunder;
(d) fails to appear before the officer of central tax, when issued with a
summon for appearance to give evidence or produce a document in an
inquiry;
(e) fails to issue invoice in accordance with the provisions of this Act or
the rules made thereunder or fails to account for an invoice in his
books of account.
Amount of Penalty
Penalty is leviable for an amount which may extend to ` 25,000/-.

4. PENALTY FOR FAILURE TO FURNISH

INFORMATION RETURN [SECTION 123]
Where a person who is required to furnish information return under section
150, has not furnished the same within the time specified in terms of sub-
section (1) or sub-section (2) of said section, the Commissioner or an officer
authorized by him in this behalf may serve upon the defaulting person a notice
under section 150(3) requiring him to furnish Information Return-
the information return within a period not ` 100/day,
exceeding 90 days from the date of service of maximum-` 5,000
notice.
If the said person still fails to furnish the return within the period specified in
notice issued under section 150(3), the proper officer may direct that such
person shall be liable to pay a penalty of one hundred rupees for each day of
the period during which the failure to furnish such return continues, subject to
a maximum of five thousand rupees.
Particulars Penalty
Failure to furnish information return Rs.100/- per day till such failure
continues <5000
5. FINE FOR FAILURE TO FURNISH STATISTICS

[SECTION 124]
If any person required to furnish any information or return under section 151,
• Fails to furnish such information or return as may be required under that
section without reasonable cause; or
• willfully furnishes or causes to furnish any information or return which he
knows to be false,
he shall be punishable with a fine which may extend to ten thousand rupees
and in case of a continuing offence to a further fine which may extend to one
hundred rupees for each day after the first day during which the offence
continues subject to a maximum limit of twenty-five thousand rupees.

6. GENERAL PENALTY [SECTION 125]

Any person, who contravenes any of the provisions of this General Penalty-
Act or any rules made thereunder for which no penalty is
` 25,000
separately provided for in this Act, shall be liable to a
penalty which may extend to twenty-five thousand rupees.
7. GENERAL DISCIPLINES RELATED TO

PENALTY [SECTION 126]
The levy of penalty is subject to a certain disciplinary regime which is based on
jurisprudence, principles of natural justice and principles governing
international trade and agreements. Such general discipline is enshrined in
section 126 of the Act. According to which –
(1) No penalty shall be imposed by any
officer under this Act for –
• Minor breaches of tax
A breach shall be
regulations, or
considered a ‘minor
• procedural requirements of the breach’ if the amount
law, or of tax involved is less
• any omission or mistake in than ` 5,000
documentation which is easily
rectifiable [As per Explanation (b) to section 126(1), an error is
easily rectifiable if it is an error apparent on the face of record] and
made without fraudulent intent or gross negligence
(2) The penalty imposed under this Act shall depend on the facts and
circumstances of each case and shall be commensurate with the degree
and severity of the breach.
(3) No penalty shall be imposed on any person without giving him an
opportunity of being heard i.e. issue of SCN and proper hearing in the
matter, affording an opportunity to the person proceeded against is must
to rebut the allegations levelled against him.
(4) The officer under this Act shall while imposing penalty in an order for a
breach of any law, regulation or procedural requirement, specify the
nature of the breach and the applicable law, regulation or procedure
under which the amount of penalty for the breach has been specified.

(5) When a person voluntarily discloses to an officer under this Act the
circumstances of a breach of the tax law, regulation or procedural
requirement prior to the discovery of the breach by the officer under this
Act, the proper officer may consider this fact as a mitigating factor when
quantifying a penalty for that person.
(6) The provisions of this section shall not apply in such cases where the
penalty specified under this Act is either a fixed sum or expressed as a
fixed percentage.
8. POWER TO IMPOSE PENALTY IN CERTAIN

CASES [SECTION 127]
This section empowers the proper officer to impose penalty even if the
penalty is not covered under any of the following proceedings-
(i) Assessment of non-filers of Returns, under section 62
(ii) Assessment of unregistered persons, under section 63
(iii) Summary Assessment under section 64
(iv) Determination under section 73 of tax not paid or short paid or
erroneously refunded or ITC wrongly availed or utilized for any reason
other than fraud or any willful misstatement or suppression of facts
(v) Determination under section 74 of tax not paid or short paid or
erroneously refunded or ITC wrongly availed or utilized by reason of
fraud or any willful misstatement or suppression of facts
(vi) Detention, seizure and release of goods and conveyances in transit under
section 129
(vii) Confiscation of goods or conveyances and levy of penalty under section 130
If proper officer is of the view that such person is liable to a penalty, he
may issue an order levying such penalty after giving a reasonable
opportunity of being heard to such person.
9. POWER TO WAIVE PENALTY OR FEE OR

BOTH [SECTION 128]
The Government may, by notification, 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 (for delay in filing of return) for such class of taxpayers and under
such mitigating circumstances as may be specified therein on the
recommendations of the Council.
10. DETENTION, SEIZURE AND RELEASE OF

GOODS AND CONVEYANCES IN TRANSIT
[SECTION 129]
(1) Notwithstanding anything contained in this Act, where any person
transports any goods or stores any goods while they are in transit in
contravention of the provisions of this Act or the rules made thereunder, all
such goods and conveyance used as a means of transport for carrying the
said goods and documents relating to such goods and conveyance shall be
liable to detention or seizure.
The Goods and/ or conveyance after detention or seizure shall be released,–
Where owner of the goods comes forward for payment of applicable
tax and penalty: -
(a) On payment of applicable tax and penalty equal to 100% of the tax
payable on such goods; or
(b) Upon furnishing a security equivalent to the amount payable under
(a) above, in such form and manner as may be prescribed.
However, in case of exempted goods, on payment of –
(a) An amount equal to 2% of the value of
goods; or Whichever is
less; or
` 25,000/-
Where owner does not come forward for payment of applicable tax
and penalty: -
(a) On payment of the applicable tax and penalty equal to 50% of the
value of the goods reduced by the tax amount paid thereon; or

However, in case of exempted goods, on payment of –

(a) An amount equal to 5% of the value of
Whichever is
goods; or
lesser; or
` 25,000/-
No such goods or conveyance shall be detained or seized without
serving an order of detention or seizure on the person transporting
the goods. [Proviso to Section 129(1)]
It has been clarified vide Circular No. 76/50/2018 GST dated
31.12.2018 that if the invoice or any other specified document is
accompanying the consignment of goods, then either the consignor
or the consignee should be deemed to be the owner. If the invoice or
any other specified document is not accompanying the consignment
of goods, then in such cases, the proper officer should determine who
should be declared as the owner of goods.
(2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply
for detention and seizure of goods and conveyances i.e. the goods and/ or
conveyance shall be released on provisional basis on payment of applicable
tax and penalty or on furnishing of security, as the case may be.
(3) The proper officer detaining or seizing goods or conveyances shall issue a
notice specifying the tax and penalty payable and thereafter, pass an order
for payment of tax and penalty under sub-section (1) above.
(4) No tax, interest or penalty shall be determined under sub-section (3)
without giving the person concerned an opportunity of being heard.
(5) On payment of amount referred in sub-section (1), all proceedings in
respect of the notice specified in sub-section (3) shall be deemed to be
concluded.
(6) Where the person transporting any goods or the owner of the goods fails to
pay the amount of tax and penalty as provided in sub-section (1) within 14
days of such detention or seizure, further proceedings shall be initiated in
accordance with the provisions of section 130.
However, where the detained or seized goods are perishable or hazardous in
nature or are likely to depreciate in value with passage of time, the said period of
14 days may be reduced by the proper officer.

11. CONFISCATION OF GOODS OR

CONVEYANCES AND LEVY OF PENALTY
[SECTION 130]
(1) Notwithstanding anything contained in this Act, if any person—
(i) supplies or receives any goods in contravention of any of the
provisions of this Act or the rules made thereunder with intent to
evade payment of tax;
(ii) does not account for any goods on which he is liable to pay tax
under this Act; or
(iii) supplies any goods liable to tax under this Act without having
applied for registration; or
(iv) contravenes any of the provisions of this Act or the rules made
thereunder with intent to evade payment of tax; or
(v) uses any conveyance as a means of transport for carriage of goods
in contravention of the provisions of this Act or the rules made
thereunder unless the owner of the conveyance proves that it was
so used without the knowledge or connivance of the owner himself,
his agent, if any, and the person in charge of the conveyance,
then, all such goods or conveyances shall be liable to confiscation and
the person shall be liable to penalty under section 122.
(2) Whenever confiscation of any goods or conveyance is authorised by this
Act, the officer adjudging it shall give to the owner of the goods an option
to pay in lieu of confiscation, such fine as the said officer thinks fit subject
to –
• Amount of fine leviable shall not exceed the market value of the
goods confiscated, less the tax chargeable thereon.
• Aggregate of fine and penalty leviable shall not be less than the
amount of penalty leviable under sub-section (1) of section 129.
Where any such conveyance is used for the carriage of the goods or
passengers for hire, the owner of the conveyance shall be given an option
to pay in lieu of the confiscation of the conveyance a fine equal to the tax
payable on the goods being transported thereon.

(3) Where any fine in lieu of confiscation of goods or conveyance is imposed

under sub-section (2), the owner of such goods or conveyance or the
person referred to in sub-section (1), shall, in addition, be liable to any tax,
penalty and charges payable in respect of such goods or conveyance.
(4) No order for confiscation of goods or conveyance or for imposition of
penalty shall be issued without giving the person an opportunity of being
heard.
(5) Where any goods or conveyance are confiscated under this Act, the title of
such goods or conveyance shall thereupon vest in the Government.
(6) The proper officer adjudging confiscation shall take and hold possession of
the things confiscated and every officer of Police, on the requisition of such
proper officer, shall assist him in taking and holding such possession.
(7) The proper officer may, after satisfying himself that the confiscated goods
or conveyance are not required in any other proceedings under this Act and
after giving reasonable time not exceeding three months to pay fine in lieu
of confiscation, dispose of such goods or conveyance and deposit the sale
proceeds thereof with the Government.
12. CONFISCATION OR PENALTY NOT TO

INTERFERE WITH OTHER PUNISHMENTS
[SECTION 131]
Without prejudice to the provisions contained in the Code of Criminal
Procedure, 1973, no confiscation made or penalty imposed under the
provisions of this Act or the rules made thereunder shall prevent the infliction
of any other punishment to which the person affected thereby is liable under
the provisions of this Act or under any other law for the time being in force.
13. PUNISHMENTS FOR CERTAIN OFFENCES

[SECTION 132]
Section 132 of the CGST Act codifies the major offences under the Act
which warrant institution of criminal proceedings and prosecution.
According to the provisions of Section 132(1), whoever commits or
causes to commit and retain the benefits arising out of, any of the
following offences, namely:—

(a) supplies any goods or services or both without issue of any invoice,
in violation of the provisions of this Act or the rules made
thereunder, with the intention to evade tax;
(b) issues any invoice or bill without supply of goods or services or
both in violation of the provisions of this Act, or the rules made
thereunder leading to wrongful availment or utilisation of input tax
credit or refund of tax;
(c) avails input tax credit using the invoice or bill referred to in clause
(b) or fraudulently avails input tax credit without any invoice or
bill
(d) collects any amount as tax but fails to pay the same to the
Government beyond a period of three months from the date on
which such payment becomes due;
(e) evades tax or fraudulently obtains refund and where such offence is
not covered under clauses (a) to (d);
(f) falsifies or substitutes financial records or produces fake accounts
or documents or furnishes any false information with an intention
to evade payment of tax due under this Act;
(g) obstructs or prevents any officer in the discharge of his duties
under this Act;
(h) acquires possession of, or in any way concerns himself in
transporting, removing, depositing, keeping, concealing, supplying,
or purchasing or in any other manner deals with, any goods which
he knows or has reasons to believe are liable to confiscation under
this Act or the rules made thereunder;
(i) receives or is in any way concerned with the supply of, or in any
other manner deals with any supply of services which he knows or
has reasons to believe are in contravention of any provisions of this
Act or the rules made thereunder;
(j) tampers with or destroys any material evidence or documents;
(k) fails to supply any information which he is required to supply under
this Act or the rules made thereunder or (unless with a reasonable
belief, the burden of proving which shall be upon him, that the
information supplied by him is true) supplies false information; or

(l) attempts to commit, or abets the commission of any of the offences

mentioned in clauses (a) to (k) of this section,
shall be punishable with the previous sanction of Commissioner, as under:
Offence Involving - Amount Punishment (Imprisonment

Involved (in `) minimum 6 months in the
absence of special and
adequate reasons to the
contrary to be recorded in
the judgment of the Court
and extending to --)
Tax evaded or input > 5 crores 5 Years and with fine

tax credit wrongly
availed or utilised or Exceeds 2 crores 3 Years and with fine
refund wrongly taken but ≤ 5 crores
Exceeds 1 crores 1 Years and with fine

but ≤ 2 crores
Commits or abets the 6 months or with fine or with

commission of an both
offence specified in
clause (f) or clause (g)
or clause (j)
For second and every No limit 5 Years and with fine

subsequent offence
under section 132
Cognizable vs. Non- cognizable Offence

An offence shall be classified as cognizable or non-cognizable as per the
provisions of sub-section (4) and sub-section (5) as under. Whereas an
offence classified as cognizable shall be non-bailable, an offence classified
as non-cognizable shall be bailable.

S. Points of Cognizable Offence Non-cognizable

No. Distinction Offence
1 Meaning Generally, as per Cr. PC, Non-cognizable

cognizable offence means offence means
serious category of relatively less
offences in respect of serious offences
which a police officer has in respect of
the authority to make an which a police
arrest without a warrant officer does not
and to start an have the authority
investigation with or to make an arrest
without the permission of without a warrant
a Court. However, GST and an
being a special investigation
legislation, only the cannot be
officers, duly empowered initiated without a
under the Act can act as Court order,
above. except as may be
authorized under
special legislation.
2 Classification of Following offences, where All offences

offence as amount of tax evaded or specified under
Cognizable or input tax credit wrongly section 132
Non-Cognizable availed or utilised or except the
refund wrongly taken > offences that are
` 5 crores, namely: cognizable and
(a) Supply of any non-bailable
goods or services offence
or both without
issue of any invoice,
in violation of the
provisions of this
Act or the rules
made thereunder,
with the intention

to evade tax;
(b) Issue of any
invoice or bill
without supply of
goods or services
or both in violation
of the provisions
of this Act, or the
rules made
thereunder leading
to wrongful
availment or
utilisation of input
tax credit or refund
of tax;
(c) avails input tax
credit using the
invoice or bill
referred to in
clause (b) or
fraudulently
avails input tax
credit without any
invoice or bill
(d) Collects any amount
as tax but fails to
pay the same to the
Government beyond
a period of three
months from the
date on which such
payment becomes
due;
3 Bailable/Non- Non-Bailable Bailable

Bailable

Meaning of ‘Tax’ for the purpose of Section 132

The term “tax” shall include the amount of tax evaded or the amount of
input tax credit wrongly availed or utilised or refund wrongly taken under
the provisions of this Act, the SGST Act, IGST Act or the UTGST Act and cess
levied under the Goods and Services Tax (Compensation to States) Act.
[Explanation to Section 132 of CGST Act]
14. LIABILITY OF OFFICERS AND CERTAIN

OTHER PERSONS [SECTION 133]
Where any person engaged in connection with the collection of statistics
under section 151 or compilation or computerisation thereof or if any
officer of central tax having access to information specified under sub-
section (1) of section 150, or if any person engaged in connection with
the provision of service on the common portal or the agent of common
portal, willfully discloses any information or the contents of any return
furnished under this Act or rules made thereunder otherwise than –
 in execution of his duties under the said sections; or
 for the purposes of prosecution for an offence under this Act or
under any other Act for the time being in force,
he shall be punishable with imprisonment for a term which may extend
to six months or with fine which may extend to twenty-five thousand
rupees, or with both.
A Person shall be prosecuted for any offence under this section –
• In case of Government Servant – With the previous sanction of
Government only;
• In case of person other than Government Servant - With the
previous sanction of Commissioner only.
15. COGNIZANCE OF OFFENCES [SECTION 134]

No court shall take cognizance of any offence punishable under this Act or the
rules made thereunder except with the previous sanction of the Commissioner,
and no court inferior to that of a Magistrate of the First Class, shall try any
such offence.

16. PRESUMPTION OF CULPABLE MENTAL

STATE [SECTION 135]
In any prosecution for an offence under this Act which requires a
culpable mental state on the part of the accused, the court shall presume
the existence of such mental state. As per Explanation (i) to Section 135,
the expression “culpable mental state” includes intention, motive,
knowledge of a fact, and belief in, or reason to believe, a fact.
While committing an act, a “culpable mental state” is a state of mind
wherein-
• the act is intentional;
• the act and its implications are understood and controllable;
• the person committing the act was not coerced and even
overcomes hurdles to the act committed;
• the person believes or has reasons to believe that the act is
contrary to law.
It shall, however, be a defense for the accused to prove the fact that he
had no such mental state with respect to the act charged as an offence in
that prosecution. As per Explanation (ii) to Section 135, a fact is said to
be proved only when the court believes it to exist beyond reasonable
doubt and not merely when its existence is established by a
preponderance of probability.
17. RELEVANCY OF STATEMENTS UNDER

CERTAIN CIRCUMSTANCES [SECTION 136]
A statement made and signed by a person on appearance in response to any
summons issued under section 70 during the course of any inquiry or
proceedings under this Act shall be relevant for the purpose of proving the truth
of the facts which it contains, in any prosecution for an offence under this Act,–
(a) when the person who made the statement is dead or cannot be found, or
is incapable of giving evidence, or is kept out of the way by the adverse
party, or whose presence cannot be obtained without an amount of delay
or expense which, under the circumstances of the case, the court
considers unreasonable; or

(b) when the person who made the statement is examined as a witness in the
case before the court and the court is of the opinion that, having regard
to the circumstances of the case, the statement should be admitted in
evidence in the interest of justice.
18. OFFENCES BY COMPANIES [SECTION 137]

Where an offence under this Act has been committed by a taxable
person being a company (means a body corporate and includes a
firm or other association of individuals), every person who, at the time
the offence was committed was in charge of, and was responsible to, the
company for the conduct of business of the company, as well as the
company, shall be deemed to be guilty of the offence and shall be liable
to be proceeded against and punished accordingly.
However, for an offence that has been committed –
• with the consent or connivance of, or
• is attributable to any negligence on the part of, any director,
manager, secretary or other officer of the company,
such director, manager, secretary or other officer shall also be deemed to
be guilty of that offence and shall be liable to be proceeded against and
punished accordingly. [Sub-Section (1) and (2) of Section 137]
Where an offence under this Act has been committed by a taxable
person being a partnership firm or a Limited Liability Partnership or
a Hindu Undivided Family or a trust, the partner or karta or managing
trustee shall be deemed to be guilty of that offence and shall be liable to
be proceeded against and punished accordingly.
However, for an offence that has been committed –
• is attributable to any negligence on the part of, any
partner/member/trustee, manager, secretary or other officer of the
partnership firm or a Limited Liability Partnership or a Hindu
Undivided Family or a trust,
such partner/member/trustee, manager, secretary or other officer shall also
be deemed to be guilty of that offence and shall be liable to be proceeded
against and punished accordingly. [Sub-Section (3) of Section 137].

Nothing contained in this section shall render any such person liable to
any punishment provided in this Act, if he proves that the offence was
committed without his knowledge or that he had exercised all due
diligence to prevent the commission of such offence. [Sub-Section (4) of
Section 137].
19. COMPOUNDING OF OFFENCES [SECTION 138

READ WITH RULE 162]
As per the provisions of section 138(1), any offence may be compounded
by the Commissioner, either before or after the institution of
prosecution, upon payment of such compounding amount in such
manner as may be prescribed, by the person accused of the offence, to
the Central Government or the State Government, as the case be.
On receipt of the application from the applicant, the commissioner shall
call for a report from the concerned officer with reference to the
particulars furnished in the application, which may be considered
relevant for the examination of such application.
On being satisfied that the applicant has cooperated in the proceedings
before him and has made full and true disclosure of facts relating to the
case, the commissioner may, by order, allow the application indicating
the compounding amount and grant him immunity from prosecution or
reject such application within 90 days of the receipt of the application.
The application shall not be decided without affording an opportunity of
being heard to the applicant and recording the grounds of such
rejection.
The application shall not be allowed unless the tax, interest and penalty
liable to be paid have been paid in the case for which the application has
been made.
The applicant shall, within a period of 30 days from the date of the
receipt of the order, pay the compounding amount as ordered by the
commissioner and shall furnish the proof of such payment to him.
In case the applicant fails to pay the compounding amount within 30
days, the order of compounding shall be vitiated and be void.

However, the following offences shall not be compounded-

(i) Offence specified in clauses (a) to (f) of sub-section (1) of section
132, if the person charged with offence had been allowed to
compound earlier in respect of any of the said offences;
(ii) Aiding/abetting offences specified in clauses (a) to (f) of sub-
section (1) of section 132, if the person charged with offence had
been allowed to compound earlier in respect of any of the said
offences;
(iii) Any offence (other than the above offences) under this Act or under
the provisions of any SGST Act/UTGST Act/IGST Act, in respect of
supplies of value > ` 1 crores, if the person charged with offence
had been allowed to compound earlier in respect of any of the said
offences;
(iv) a person who has been accused of committing an offence under
this Act which is also an offence under any other law for the time
being in force;
(v) a person who has been convicted for an offence under this Act by a
court;
(vi) a person who has been accused of committing an offence specified
in clause (g) or clause (j) or clause (k) of sub-section (1) of section
132; and
(vii) any other class of persons or offences as may be prescribed:
Compounding shall be allowed only after making payment of tax, interest
and penalty involved in such offences. Further, any compounding allowed
under the provisions of this section shall not affect the proceedings, if
any, instituted under any other law. [Proviso to Section 138(1)]
The amount for compounding of offences under this section shall be
such as may be prescribed, subject to –
• The minimum limit for compounding amount is to be the higher of
the following amounts:-
(i) 50% of tax involved, or

(ii) ` 10,000.
• The upper limit for compounding amount is to be higher of the
following amounts: -
(i) 150% of tax involved or
(ii) ` 30,000
[Sub-Section (2) of Section 138]

On payment of such compounding amount as may be determined by the
Commissioner, no further proceedings shall be initiated under this Act
against the accused person in respect of the same offence and any
criminal proceedings, if already initiated in respect of the said offence,
shall stand abated. [Sub-Section (3) of Section 138]
Immunity granted to a person may, at any time, be withdrawn by the
commissioner, if he is satisfied that such person had, in the course of the
compounding proceedings, concealed any material particulars or had
given false evidence. Thereupon such person may be tried for the offence
with respect to which immunity was granted or for any other offence that
appears to have been committed by him in connection with the
compounding proceedings and the provisions of the Act shall apply as if
no such immunity had been granted.
While, the penalty under section 122(1) is imposable on a

taxable person, penalties under sections 122(1A), 122(3) and
132(1) are imposable on any person.
It may be noted that as per section 75(13) of the CGST Act,

where any penalty is imposed under section 73 or section 74,
no penalty for the same act or omission shall be imposed on
the same person under any other provision of this Act.

TEST YOUR KNOWLEDGE

1. What are the various type of offences which may be committed by a taxable
person liable to penalty?
2. What is the quantum of penalty for an offence mentioned under section
122(1) and section 122(2)?
3. Is there any penalty prescribed for a person other than the taxable person
under section 122?
4. Mr. X, an unregistered person under GST purchases the goods supplied by
Mr. Y who is a registered person without receiving a tax invoice from Mr. Y
and thus helps in tax evasion by Mr. Y. What disciplinary action may be
taken by tax authorities to curb such type of cases and on whom?
5. Suppose, in the above case, a disciplinary action is taken against Mr. X and an
adhoc penalty of ` 20,000/- is imposed by passing an order without describing
contravention for which penalty is going to be imposed and without mentioning
the provisions under which penalty is going to be imposed. Should Mr. X proceed
to pay for penalty or challenge the order passed by department?
6. Examine the implications as regards the bailability and quantum of
punishment on prosecution, in respect of the following cases pertaining to the
month of December under CGST Act, 2017-
(i) 'X' collects ` 245 lakh as tax from its clients and deposits ` 241 lakh
with the Central Government. It is found that he has falsified financial
records and has not maintained proper records.
(ii) 'Y' collects ` 550 lakh as tax from its clients but deposits only
` 30 lakh with the Central Government.
What will be the implications with regard to punishment on prosecution of 'X' and
'Y' for the offences? What would be the position, if 'X' and 'Y' repeat the offences?
It may be assumed that offences are proved in the Court.
7. What are cognizable and non-cognizable offences under section 132 of CGST
Act, 2017?
8. Where an offence under the GST law is committed by a taxable person being
a trust, who are deemed to be guilty of the offence and under what
circumstances? When do the relevant provisions become inapplicable in
respect of individuals concerned with the trust?

ANSWERS
1. There are 21 offences which may be committed by a taxable person and
may be classified into following categories based upon their nature:
Offences having nexus with invoice
(i) Issue of invoice or bill without making supply;
(ii) Issuing invoice or document using GSTIN of another person;
(iii) Making a supply without invoice or with false/ incorrect invoice;
Offences having nexus with payment of tax
(iv) Not paying any amount collected as tax for a period exceeding
three months;
(v) Not paying tax collected in contravention of the CGST/SGST Act for
a period exceeding 3 months;
(vi) Non deduction or lower deduction of tax deducted at source or not
depositing tax deducted at source under section 51;
(vii) Non collection or lower collection of or non-payment of tax
collectible at source under section 52;
(viii) Availing/utilizing input tax credit without actual receipt of goods
and/or services;
(ix) Availing/distributing ITC by an Input Service Distributor in violation
of Section 20;
(x) Fraudulently obtains any refund of tax;
(xi) Suppressing turnover;
Offences having nexus with records and related information
(xii) Falsification/ substitution of financial records or furnishing of fake
accounts/ documents or furnishing false information/ return with
intent to evade payment of tax;
Failure to maintain accounts/ documents in the manner specified in
the Act or failure to retain accounts/ documents for the period
specified in the Act;
(xiii) Failure to furnish information/ documents required by an officer in
terms of the Act/ Rules or furnishing false information/ documents
during the course of any proceeding;

(xiv) Tampering/ destroying any material evidence/ documents;

(xv) Obstructing or preventing any official in discharge of his duty;
Offences having nexus with Registration
(xvi) Failure to register despite being liable to pay tax;
(xvii) Furnishing false information regarding registration particulars
either at the time of applying for registration or subsequently
Offences having nexus with Supply/Transport of goods
(xviii) Transporting goods without prescribed documents;
(xix) Supplying/ transporting/ storing any goods liable to confiscation;
(xx) Disposing of/ tampering with goods detained/ seized/ attached
under the Act.
2. Section 122(1) provides that any taxable person who has committed any of
the 21 offences mentioned thereunder, shall be liable to a penalty which
shall be higher of the following amounts:
(a) ` 10,000/-; or
(b) An amount equivalent to, any of the following (Applicable as the
case may be) –
(i) Tax evaded; or
(ii) Tax not deducted under section 51 or short deducted or
deducted but not paid to the Government; or
(iii) Tax not collected under section 52 or short collected or
collected but not paid to the Government; or
(iv) Input tax credit availed of or passed on or distributed
irregularly; or
(v) Refund claimed fraudulently
Further, Section 122(1A) provides that any person who retains the
benefit of a transaction covered under clauses (i), (ii), (vii) or clause
(ix) of sub-section (1) and at whose instance such transaction is
conducted, shall be liable to a penalty of an amount equivalent to
the tax evaded or input tax credit availed of or passed on.
Also, Section 122(2) provides that if any registered person who supplies any
goods and/or services on which any tax has not been paid or short paid or

erroneously refunded or where the ITC has been wrongly availed or

utilized:-
(i) for any reason other than the reason of fraud or any willful misstatement
or suppression of facts to evade tax, he shall be liable to a penalty of ` 10,000
or 10% of the tax due from such person, whichever is higher.
(ii) for reason of fraud, or any willful misstatement or suppression of facts
to evade tax, penalty shall be equal to ` 10,000 or the tax due from such
person, whichever is higher.
3. Yes, section 122(3) provides for levy of penalty extending to ` 25,000/- for
any person who-
• aids or abets any of the 21 offences specified in section 122(1),
• deals in any way (whether transporting, removing, depositing,
keeping, concealing, supplying or purchasing or in any other
manner) with goods that are liable to confiscation,
• receives or deals with supply of services in contravention of the Act,
• fails to appear before an authority who has issued a summon,
• fails to issue any invoice for a supply or account for any invoice in
his books of accounts.
4. Both Mr. X and Mr. Y will be offender and will be liable to penalty as under:
Mr. X – Penalty leviable under section 122(3) which may extend to ` 25,000/-;
Mr. Y – Penalty leviable under section 122(1), which will be higher of
following, namely (i) ` 10,000/- or (ii) 100% of tax evaded.
5. The levy of penalty is subject to a certain disciplinary regime which is based
on jurisprudence, principles of natural justice and principles governing
international trade and agreements. Such general discipline is enshrined in
section 126 of the Act. Accordingly—
• no penalty is to be imposed without affording an opportunity of
being heard to the person proceeded against to rebut the
allegations levelled against him,
• the penalty is to depend on the totality of the facts and
circumstances of the case, the penalty imposed is to be
commensurate with the degree and severity of breach of the
provisions of the law or the rules alleged,
• the nature of the breach is to be specified clearly in the order

imposing the penalty,

• the provisions of the law under which the penalty has been
imposed is to be specified.
Since the order suffers from lack of clarity about nature of breach which has
taken place and about applicable law under which penalty has been
imposed, such order passed by the department should be challenged.
6. (i) As per section 132(1)(d)(iii) of the CGST Act, 2017, failure to pay any
amount collected as tax beyond 3 months from due date of payment
is punishable with specified imprisonment and fine provided the
amount of tax evaded exceeds at least ` 100 lakh. Therefore, failure to
deposit ` 4 lakh collected as tax by ‘X’ will not be punishable with
imprisonment.
Further, falsification of financial records by ‘X’ is punishable with
imprisonment up to 6 months or with fine or both vide section
132(1)(f)(iv) of the CGST Act, 2017 assuming that falsification of
records is with an intention to evade payment of tax due under the
CGST Act, 2017and the said offence is bailable in terms of section
132(4) of the CGST Act, 2017.
(ii) Failure to pay any amount collected as tax beyond 3 months from due
date is punishable with imprisonment upto 5 years and with fine, if the
amount of tax evaded exceeds ` 500 lakh in terms of section
132(1)(d)(i) of the CGST Act, 2017.
Since the amount of tax evaded by ‘Y’ exceeds ` 500 lakh (` 550 lakh -
` 30 lakh), ‘Y’ is liable to imprisonment upto 5 years and with fine. It
has been assumed that amount of ` 520 lakh collected as tax is not
paid to the Government beyond 3 months from the due date of
payment of tax. Further, the imprisonment shall be of at least 6
months in the absence of special and adequate reasons to the
contrary to be recorded in the judgment of the Court vide section
132(3) of the CGST Act, 2017. Such offence is non-bailable in terms of
section 132(5) of the CGST Act, 2017.
If ‘X ’and ‘Y’ repeat the offence, they shall be punishable for second
and for every subsequent offence with imprisonment upto 5 years and
with fine in terms of section 132(2) of the CGST Act, 2017. Such
imprisonment shall also be of at least 6 months in the absence of

special and adequate reasons to the contrary to be recorded in the

judgment of the Court.
7. As per section 132(5) of CGST Act, 2017, following offences are cognizable
offences, provided amount of tax evaded or input tax credit wrongly availed/
utilised or refund wrongly taken exceeds ` 5 crores, namely:
(a) Supply without issuance of invoice with the intention to evade tax
(b) Issuance of any invoice/ bill without supply leading to wrongful
availment/ utilisation of ITC or refund of tax
(c) Availment of ITC using invoice/ bill against which no supplies have
been made or fraudulent availment of ITC without any invoice or
bill.
(d) Failure to pay the amount collected as tax to the Government beyond
a period of 3 months from the due date of payment.
Further, section 132(4) of CGST Act, 2017 provides that all offences specified
under section 132 are non-cognizable offences except the cognizable
offences specified as aforesaid.
8. Section 137 of the CGST Act, 2017 stipulates that where an offence under the
GST law is committed by a taxable person being a trust, the managing trustee
shall be deemed to be guilty of that offence and shall be liable to be
proceeded against and punished accordingly.
Further, where it is proved that the offence committed by the trust has been
committed –
• is attributable to any negligence on the part of any other individual
concerned with the trust,
he shall also be deemed to be guilty of that offence and shall be liable to be
proceeded against and punished accordingly.
The relevant provisions will become inapplicable in respect of individuals
concerned with the trust, if they prove that the offence was committed without
their knowledge or that they had exercised all due diligence to prevent the
commission of such offence.
Examples/Illustrations/Questions and Answers, as the case may be, given
in the Chapter are based on the position of GST law existing as on
30.04.2021.

AMENDMENTS MADE VIDE THE FINANCE ACT, 2021

The Finance Act, 2021 has come into force from 28.03.2021. However, the
amendments made in the CGST Act and the IGST Act vide the Finance Act, 2021
would become effective only from a date to be notified by the Central
Government in the Official Gazette. Such a notification was not issued till
30.04.2021. Therefore, the applicability or otherwise of such amendments for
May 2022 and/or November 2022 examinations shall be informed by the ICAI by
way of an announcement.
In the table given below, the existing provisions 2 of sections 129 and 130 of the
CGST Act, 2017 are compared with the provisions as amended by the Finance Act,
2021.
Once the announcement for applicability of such amendments for examination(s)
is made by the ICAI, students should read the amended provisions given
hereunder in place of the related provisions discussed in the Chapter.
Existing provisions Provisions as amended Remarks

by the Finance Act,
2021
Section 129 Section 129 Section 129 is being

Sub-section (1) Sub-section (1) amended to delink the
proceedings under
Clause (a) Clause (a)
that section relating to
on payment of the on payment of penalty detention, seizure and
applicable tax and penalty equal to 200% of the tax release of goods and
equal to one 100% of the payable on such goods conveyances in transit,
tax payable on such goods and, in case of from the proceedings
and, in case of exempted exempted goods, on under section 130
goods, on payment of an payment of an amount relating to confiscation
amount equal to 2% of the equal 2% of the value of of goods or
value of goods or twenty- goods or twenty-five conveyances and levy
five thousand rupees, thousand rupees, of penalty.
whichever is less, where the whichever is less, where
owner of the goods comes the owner of the goods
forward for payment of comes forward for
2
Provisions existing as on 30.04.2021

such tax and penalty; payment of such

penalty;
Clause (b)
on payment of the
applicable tax and penalty Clause (b)
equal to the 50% of the on payment of penalty
value of the goods reduced equal to 50% of the
by the tax amount paid value of the goods or
thereon and, in case of 200% of the tax payable
exempted goods, on on such goods,
payment of an amount whichever is higher, and
equal to 5% of the value of in case of exempted
goods or twenty five goods, on payment of
thousand rupees, an amount equal to 5%
whichever is less, where the of the value of goods or
owner of the goods does twenty-five thousand
not come forward for rupees, whichever is
payment of such tax and less, where the owner of
penalty; the goods does not
come forward for
payment of such
penalty;
Sub-section (2)
The provisions of sub-
section (6) of section 67 Sub-section (2)
shall, mutatis mutandis, Omitted
apply for detention and
seizure of goods and
conveyances.
Sub-section (3)
Sub-section (3)
The proper officer
detaining or seizing goods The proper officer
or conveyances shall issue detaining or seizing
a notice specifying the tax goods or conveyance
and penalty payable and shall issue a notice
within seven days of

thereafter, pass an order such detention or

for payment of tax and seizure, specifying the
penalty under clause (a) or penalty payable, and
clause (b) or clause (c). thereafter, pass an order
within a period of seven
days from the date of
service of such notice,
for payment of penalty
under clause (a) or
Sub-section (4) clause (b) of sub-section
(1).
No tax, interest or
penalty shall be
determined under sub- Sub-section (4)
section (3) without giving No penalty shall be
the person concerned an determined under sub-
opportunity of being section (3) without giving
heard. the person concerned an
opportunity of being
heard.
Sub-section (6)
Where the person
transporting any goods or Sub-section (6)
the owner of the goods Where the person
fails to pay the amount of transporting any goods
tax and penalty as or the owner of such
provided in sub-section (1) goods fails to pay the
within 14 days of such amount of penalty
detention or seizure, under sub-section (1)
further proceedings shall within 15 days from the
be initiated in accordance date of receipt of the
with the provisions of copy of the order
section 130: passed under sub-
Provided that where the section (3), the goods
detained or seized goods or conveyance so
are perishable or detained or seized shall
hazardous in nature or are be liable to be sold or

likely to depreciate in value disposed of otherwise,

with passage of time, the in such manner and
said period of fourteen within such time as
days may be reduced by may be prescribed, to
the proper officer recover the penalty
payable under sub-
section (3):
Provided that the

conveyance shall be
released on payment by
the transporter of
penalty under sub-
section (3) or one lakh
rupees, whichever is
less:
Provided further that

where the detained or
seized goods are
perishable or hazardous
in nature or are likely
to depreciate in value
with passage of time,
the said period of
fifteen days may be
reduced by the proper
officer.
Section 130 Section 130 Section 130 is being

Sub-section (1) Sub-section (1) amended to delink the
proceedings under
Notwithstanding Where any
that section relating to
anything contained in person……section 122.
confiscation of goods
this Act, if any
or conveyances and
person……section 122.
levy of penalty from
the proceedings under

2nd Proviso to Sub- 2nd Proviso to

Sub- section 129 relating to
section (2) section (2) detention, seizure and
Provided further that the Provided further that the release of goods and
aggregate of such fine and aggregate of such fine conveyances in transit.
penalty leviable shall not and penalty leviable shall
be less than the amount of not be less than the
penalty leviable under penalty equal to
sub-section (1) of section hundred per cent of the
129. tax payable on such
goods.
Sub-section (3)
Where any fine in lieu of Sub-section (3)
confiscation of goods or Omitted
conveyance is imposed
under sub-section (2), the
owner of such goods or
conveyance or the person
referred to in sub-section
(1), shall, in addition, be
liable to any tax, penalty
and charges payable in
respect of such goods or
conveyance.

Offences and Penalties Under GST

Uploaded by

Copyright:

Available Formats

Offences and Penalties Under GST

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Offences and Penalties Under GST

Uploaded by

Copyright:

Available Formats

21

© The Institute of Chartered Accountants of India

What is penalty and

© The Institute of Chartered Accountants of India

However, before proceeding to understand the provisions, let us first go

 Conveyance includes a vessel, an aircraft and a vehicle; [Section 2(34)].

1 As discussed in this chapter

© The Institute of Chartered Accountants of India

3. PENALTY FOR CERTAIN OFFENCES [SECTION

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

This shall cover submitting of incorrect information or concealing of

© The Institute of Chartered Accountants of India

(ii) Tax not deducted under section 51 or short deducted or deducted

© The Institute of Chartered Accountants of India

(a) For any reason, Shall be liable to a penalty for

(b) For reason of fraud Shall be liable to a penalty for

As per the provisions of sub-section (3) of section 122, penalty is leviable

© The Institute of Chartered Accountants of India

4. PENALTY FOR FAILURE TO FURNISH

5. FINE FOR FAILURE TO FURNISH STATISTICS

© The Institute of Chartered Accountants of India

6. GENERAL PENALTY [SECTION 125]

7. GENERAL DISCIPLINES RELATED TO

© The Institute of Chartered Accountants of India

8. POWER TO IMPOSE PENALTY IN CERTAIN

9. POWER TO WAIVE PENALTY OR FEE OR

© The Institute of Chartered Accountants of India

10. DETENTION, SEIZURE AND RELEASE OF

© The Institute of Chartered Accountants of India

However, in case of exempted goods, on payment of –

© The Institute of Chartered Accountants of India

11. CONFISCATION OF GOODS OR

© The Institute of Chartered Accountants of India

(3) Where any fine in lieu of confiscation of goods or conveyance is imposed

12. CONFISCATION OR PENALTY NOT TO

13. PUNISHMENTS FOR CERTAIN OFFENCES

© The Institute of Chartered Accountants of India

© The Institute of Chartered Accountants of India

(l) attempts to commit, or abets the commission of any of the offences

Offence Involving - Amount Punishment (Imprisonment

Tax evaded or input > 5 crores 5 Years and with fine

Exceeds 1 crores 1 Years and with fine

Commits or abets the 6 months or with fine or with

For second and every No limit 5 Years and with fine

Cognizable vs. Non- cognizable Offence

© The Institute of Chartered Accountants of India

S. Points of Cognizable Offence Non-cognizable

1 Meaning Generally, as per Cr. PC, Non-cognizable

2 Classification of Following offences, where All offences

© The Institute of Chartered Accountants of India

3 Bailable/Non- Non-Bailable Bailable

© The Institute of Chartered Accountants of India

Meaning of ‘Tax’ for the purpose of Section 132

14. LIABILITY OF OFFICERS AND CERTAIN

15. COGNIZANCE OF OFFENCES [SECTION 134]

© The Institute of Chartered Accountants of India

16. PRESUMPTION OF CULPABLE MENTAL

17. RELEVANCY OF STATEMENTS UNDER