Various GST Penalties

Various GST Penalties

It is important to know that GST registration numbers are also based on PAN (Permanent Account Number) allotted in Income-tax Act, 1961. In GST, too many provisions of penalties have been made as made in existing VAT laws of various states. Such penalty provisions are made  in almost every tax-law. Since this GST law is a mixture of excise, service tax and VAT law, the heavy penalties of all laws have been imported into this law. But the number of GST penalties in this law is very high in numbers and in quantum in addition to the provisions of imprisionment.

There are numerous GST penalties and therefore, we have divided such penal provisions under various categories – 

  1. GST Penalties for Small Offences,
  2. GST Penalties Relating to Returns, 
  3. GST Penalties for Other Statements etc., 
  4. GST Penalties Relating to Transportation, 
  5. Provisions Relating to Seizure of Goods and Vehicles, 
  6. Heavy GST Penalties relating to Tax Evasion and  
  7. Offences by Government Authorities and their Associates.

(1) GST Penalties for Small Offences

puremaal-ad-1 Various GST Penalties

Section Why GST Penalties ? GST Penalties / Punishment
122 (1)

(i)

A taxable person who supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice; Rs. 10,000/- or an amount equivalent to the tax evaded, whichever is higher.
(ii) A taxable person who issues any invoice or bill without supply of goods or services or; Rs. 10,000/- or an amount equivalent to the tax evaded, whichever is higher.
(iii) A taxable person who collects any amount as tax but fails to pay the same beyond a period of 3 months from the due date; Rs. 10,000/- or an amount equivalent to the tax evaded, whichever is higher.
(iv) A taxable person who 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 due date; Rs. 10,000/- or an amount equivalent to the tax evaded, whichever is higher.
(v) A taxable person who fails to deduct the tax in accordance with the provisions or deducts an amount which is less than the amount required to be deducted or where he fails to pay to the Government the amount deducted as tax; Rs. 10,000/- or the tax not deducted or short deducted or deducted but not paid to the Government, whichever is higher.
(vi) A taxable person who 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; Rs. 10,000/- or tax not collected under section 52 or short collected or collected but not paid to the Government, whichever is higher.
(vii) A taxable person who takes or utilises input tax credit without actual receipt of goods or services or both either fully or partially, in contravention of law; Rs. 10,000/- or  input tax credit availed of or passed on or distributed irregularly, whichever is higher.
(viii) A taxable person who fraudulently obtains refund of tax under this Act; Rs. 10,000/-  or the refund claimed fraudulently, whichever is higher.
(ix) A taxable person who takes or distributes input tax credit in contravention of section 20, or the rules made thereunder; Rs. 10,000/- or  input tax credit availed of or passed on or distributed irregularly, whichever is higher.
(x) A taxable person who 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; Non-appealable decisions and orders. Rs. 10,000/- or amount of the tax evaded, whichever is higher.
(xi) A taxable person who is liable to be registered under this Act but fails to obtain registration; Rs. 10,000/- or amount of the tax evaded, whichever is higher.
(xii) A taxable person who furnishes any false information with regard to registration particulars, either at the time of applying for registration, or subsequently; Rs. 10,000/- or amount of the tax evaded, whichever is higher.
(xiii) A taxable person who obstructs or prevents any officer in discharge of his duties under this Act; Rs. 10,000/-.
(xiv) A taxable person who transports any taxable goods without the cover of documents as may be specified in this behalf; Rs. 10,000/- or amount of the tax evaded, whichever is higher.
(xv) A taxable person who suppresses his turnover leading to evasion of tax under this Act; Rs. 10,000/- or amount of the tax evaded, whichever is higher.
(xvi) A taxable person who fails to keep, maintain or retain books of account and other documents in accordance with the provisions.; Rs. 10,000/-
(xvii) A taxable person who fails to furnish information or documents called for by an officer as per law or furnishes false information or documents during any proceedings ; Rs. 10,000/-
  (xviii) A taxable person who supplies, transports or stores any goods which he has reasons to believe are liable to confiscation under this Act; Rs. 10,000/- or amount of the tax evaded, whichever is higher.
(xix) A taxable person who issues any invoice or document by using the registration number of another registered person; Rs. 10,000/- or an amount equivalent to the tax evaded, whichever is higher.
(xx) A taxable person who tampers with, or destroys any material evidence or document; Rs. 10,000/-.
(xxi) A taxable person who disposes off or tampers with any goods that have been detained, seized, or attached under this Act, Rs. 10,000/- or an amount equivalent to the tax evaded, whichever is higher.
122(2) (a) Any registered person who supplies any goods or services or both on which any tax has not been paid or short-paid or erroneously refunded, or where the input tax credit has been wrongly availed or utilized  for any reason, other than the reason of fraud or any wilful misstatement or suppression of facts to evade tax, Rs. 10,000/- or 10% of the tax due from such person, whichever is higher;
(b) Any registered person who supplies any goods or services or both on which any tax has not been paid or short-paid or erroneously refunded, or where the input tax credit has been wrongly availed or utilized for reason of fraud or any wilful misstatement or suppression of facts to evade tax, Rs. 10,000/- or the 100% tax due from such person, whichever is higher;
122(3) (a) Any person who aids or abets any of the offences specified in clauses (i) to (xxi) of sub-section (1); Max. Rs. 25,000/-
(b) Any person who 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 law; Max. Rs. 25,000/-
(c) Any person who 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; Max. Rs. 25,000/-
(d) Any person who 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, Max. Rs. 25,000/-
(e) Any person who 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, Max. Rs. 25,000/-

(2) GST Penalties Relating to Returnspuremaal-ad-1 Various GST Penalties

Section Why GST Penalties ? GST Penalties / Punishment
123. If a person who is required to furnish an information or return under section 150 fails to do so within the period specified in the notice issued under sub-section (3) thereof, Rs. 100/- for each day of delay subject to maximum Rs. 5,000/- for each such return and statement.

(3) GST Penalties for Other Statements etc.

puremaal-ad-1 Various GST Penalties

Section Why GST Penalties ? GST Penalties / Punishment
124(a)

 

If any person required to furnish any information or return under section 151, without reasonable cause fails to furnish such information or return as may be required under that section, or Shall be punishable with a fine which may extend to Rs. 10,000/- and in case of a continuing offence Rs. 100/- for each day subject to a maximum limit of Rs. 25,000/-
(b) If any person required to furnish any information or return under section 151, wilfully furnishes or causes to furnish any information or return which he knows to be false, Shall be punishable with a fine which may extend to Rs. 10,000/- and in case of a continuing offence Rs. 100/- for each day subject to a maximum limit of Rs. 25,000/-
125 Any person, who contravenes any of the provisions of this Act or any rules made thereunder for which no penalty is separately provided for in this Act, Maximum Rs. 25,000/-

 (4) GST Penalties Relating to Transportation

puremaal-ad-1 Various GST Penalties

Section Why GST Penalties ? GST Penalties / Punishment
129(1)(a) 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 [where the owner of the goods comes forward for payment of such tax and penalty (in case of voluntary Surrender / Compromise)] ; (i)                  All goods,  conveyance used as a means of transport and documents shall be liable to detention or seizure,

(ii)                After detention or seizure, shall be released  on payment of the applicable tax and Penalty 100% of the tax payable and,

(iii)         In case of exempted goods, on payment of penalty amount equal to 2% of the value of goods or Rs. 25,000/- whichever is less,

(b) 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 [where the owner of the goods does not come forward for payment of such tax and penalty (in absence of voluntary Surrender / Compromise)] ;  ,

 

(i)                  All goods and conveyance used as a means of transport for carrying the said goods and documents shall be liable to detention or seizure,

(ii)                After detention or seizure, shall be released, on payment of the applicable tax and penalty equal to the 50% of the value of the goods reduced by the tax amount paid thereon and,

(iii)               In case of exempted goods, on payment of an amount equal to 5% of the value of goods or Rs. 25,000/-, whichever is less.

(c) 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,

 

Detained / seized Vehicle and Goods shall be released, upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed:

(5) Provisions Relating to Seizure of Goods and Vehiclespuremaal-ad-1 Various GST Penalties

Section Why GST Penalties ? GST Penalties / Punishment
130. (1)(i) Notwithstanding anything contained in this Act, if any person 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; or All such goods or conveyances shall be liable to confiscation (जब्ती) and the person shall be liable to penalty under section 122.
(ii) Notwithstanding anything contained in this Act, if any person does not account for any goods on which he is liable to pay tax under this Act; or All such goods or conveyances shall be liable to confiscation (जब्ती) and the person shall be liable to penalty under section 122.
(iii) Notwithstanding anything contained in this Act, if any person supplies any goods liable to tax under this Act without having applied for registration; or All such goods or conveyances shall be liable to confiscation (जब्ती) and the person shall be liable to penalty under section 122.
(iv) Notwithstanding anything contained in this Act, if any person contravenes any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or All such goods or conveyances shall be liable to confiscation (जब्ती) and the person shall be liable to penalty under section 122.
(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, All such goods (माल) or conveyances (परिवहन साधन) shall be liable to confiscation (जब्ती) 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:

 

 

 

 

 

 

(i)                  Such fine leviable shall not exceed the market value (माल की कीमत) of the goods confiscated, less the tax chargeable thereon:

(ii)                Aggregate of such fine and penalty leviable shall not be less than the amount of penalty leviable under sub-section (1) of section 129:

(iii)         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), In addition, be liable to any tax, penalty and charges payable in respect of such goods or conveyance.
(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) Heavy GST Penalties relating to Tax Evasionpuremaal-ad-1 Various GST Penalties

Section Why GST Penalties? GST Penalties / Punishment
132 (1) (a) Whoever commits any of the following offences, namely:—

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;

(i)                  in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds 5.00 Crores rupees, with imprisonment for a term which may extend to 5 years and with fine (5 साल की सजा व जुर्माना);

(ii)                 in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds 2.00 Crores rupees but does not exceed 5.00 Crores rupees, with imprisonment for a term which may extend to three years and with fine (3 साल की सजा व जुर्माना);

(iii)               in the case of any other offence where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds 1.00 Crores but does not exceed 2.00 Crores, with imprisonment for a term which may extend to one year and with fine (1 साल की सजा व जुर्माना);

(i)                   in cases where he commits or abets the commission of an offence specified in clause (f) or clause (g) or clause (j), he shall be punishable with imprisonment for a term which may extend to 6 months or with fine or with both (6 माह की सजा व जुर्माना).

(ii)                 Where any person convicted of an offence under this section is again (दुबारा) convicted of an offence under this section, then, he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to five years and with fine (5 साल की सजा व जुर्माना).

(iii)               The imprisonment referred to in clauses (i), (ii) and (iii) of sub-section (1) and sub-section (2) shall, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the Court, be for a term not less than six months.

(iv)        The offences specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) and punishable under clause (i) of that sub-section shall be cognizable and non-bailable (गेर-जमानती)

(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 such invoice or bill referred to in clause (b);
(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, fraudulently avails input tax credit 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,

puremaal-ad-1 Various GST Penalties

(7) Offences by Government Authorities and their Associates

Section Why GST Penalties ? GST Penalties / Punishment
133 (1) 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, wilfully 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 Rs. 25,000/-, or with both.

 

GST-Penalties Various GST Penalties

Compiled by  CA. K.C.Moondra 

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