Offences and Penalties for Violation of GST Law

Violation of GST Law

Offences are the most important part of any act, and their penalties is the law enforceability on that act. Similarly, recently passed act namely Goods and Services Act has its own offences and penalties. Penalties for any offences provides strictness to that act and provides smooth running of the act. There are various penalties under Goods and Services Act, mentioned below.

CONCESSIONAL PENALTY: CASES NOT INVOLVING FRAUD OR WILFUL SUPPRESSION

Those cases which does not involve any kind of fraud, or wilful misstatement or suppression of fact with an intention to evade tax payment, if payment is made as under:

• Before Issuance of Show cause notice – No penalty
• Within 30 days of the Show cause notice – No penalty
• After 30 days of the Issuance of Show cause notice – 10% of the tax or Rs. 10,000 whichever is highest.

PENALTY IN CASES INVOLVING FRAUD OR WILFUL SUPPRESSION

Cases involving fraud or wilful suppression, to evade tax payment if payment is made as under:

• Before Issuance of Show cause notice – 15% of tax amount
• Within 30 days after the issuance of Show cause notice – 25% of tax amount
• Within 30 days from the issuance of Show cause notice – 50% of the tax amount

SECTION 66

Penalties under Section 66 of the Models Act, is equivalent to INR 10,000/- or tax not deducted or tax deducted but not paid shall be imposed in the following cases:

• Supplies any goods or services without issue of any invoice or issues an incorrect or false invoice regarding any such supply,
• Issues any invoice or bill without supply of goods and/or services in violation of the provisions of this act, or the rules made thereunder,
• Collects any amount as tax but fails to pay the same to the credit of the appropriate government beyond a period of three months from the date on which such payment becomes due,
• Collects any tax in contravention of the provisions of this act but fails to pay the same to the credit of the appropriate government beyond the period of three months from the date on which such payment becomes due,
• Fails to deduct the tax in terms of sub section (1) of section 46, 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 credit of the appropriate government under sub-section (2) thereof, the amount deducted as tax,
• Takes and/or utilizes input tax credit without receipt of goods and/or services either fully or partially, in violation of the provisions of this act, or the rules made thereunder,
• Fraudulently obtains refund of any CGST/SGST under this act,
• Takes or distributes input tax credit in violation of section 21, or the rules made thereunder,
• Falsifies or substitutes financial records or produces fakes accounts and/or documents or furnishes any false information or return with an intention to evade payment of tax due under this act,
• Is liable to be registered under this Act but fails to obtain registration,
• Furnishes any false information with regard to particulars specified as mandatory, either at the time of applying for registration or subsequently,
• Obstructs or prevents any officer in discharge of his duties,
• Transports any taxable goods without the cover of any specified documents,
• Suppresses his turnover leading to evasion of tax,
• Fails to keep, maintain or retain books of account and other documents as specified in law,
• Fails to furnish information and/or documents called for by a CGST/SGST officer or furnishes false informationand/or documents during any proceedings,
• Supplies, transports or stores any goods which he has reason to believe are liable for confiscation,
• Issues any invoice or document by using the identification number of another taxable person,
• Tampers with or destroys any material elements,
• Disposes off, or tampers with any goods that have been detained, seized or attached under this act.

PENALTY UPTO INR 25,000/-

Any person who contravenes any of the provisions of this act or any other rules made under this Act for which no separate penalty has been mentioned, shall be held liable to a penalty of up to twenty-five thousand rupees.

SECTION 68

General disciplines with regards to penalties are featured in section 68 of Model Act. As per the section 68, penalties cannot be imposed for minor breaches or procedural requirements.

If there are any errors in documentation which can be easily rectified, then there will be no penalties imposed.

Person who is liable for penalty must be issued a notice laying down the cause of action, breach and the provisions invoked.

To get GST Registration, click here

Author: This blog is written by Ms. Ayushi Mishra, a passionate blogger & intern at  Aapka Consultant.

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