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The Indian government decided to launch GST with many objectives like simplification and bringing order in Indirect tax regime of the country. Also it aims for elimination of double taxation issue and summing up the myriad of indirect taxes in one Goods and Service Tax.
Along with all these reasons, one of the main reasons for the introduction of GST is to bring clarity in the tax collection system and elimination of tax evaders and offenders. However, there is no end to people to seek ways to avoid taxes and manipulation of laws. Here we will discuss offences and Penalty Provisions under GST.
In order to identify and discourage such offenders, provisions relating to such offences and penalties for such offences are mentioned in Chapter XIX of Central Goods and Service Tax Act, 2017[1].
Table of Contents
Section 122 of the CGST Act, 2017 specified 21 situations as offenses under the law. They are as mentioned below:
Offences relating to invoicing and Documentation:
Offences relating to Tax evasion:
Offences relating to Fraudulent Intent:
Offences related to Obstruction:
We have discussed the list of offences, now let’s try and understand the Penalty Provisions under GST for such offences by the authorities.
The taxpayer Registered under GST will be liable to pay penalty if he supplied any goods or services or both, but:
Penalty amount
In order to decide how much penalty is to be charged, the intention behind such an offence is to be considered. On this basis, two situations are to be considered:
Any person who is not registered under GST will also be covered under the ambit of Penalty Provisions under GST if they commit any of the following offences:
Such a person will be liable to pay a penalty which can extend up to 25000 rupees as per the Penalty Provisions under GST. This penalty is irrespective of whether the person is registered under GST or not.
In case where a GST registered person is unhappy with penalties related order passed under the GST Act, then such person may appeal against such order or decision so passed. The appeal process operates in the similar way irrespective of the type of offence and penalty that is applicable.
The following kinds of appeals are available (in chronological order):
The first appellate authority is the first court of appeal where a person affected by an order, passed by the adjudicating authority, appeal.
Then comes appellate tribunal which is a quasi judicial body that mediates the disputes and hears appeals against orders of the first appellate authority.
High court is the next step of appeal for those contesting a decision declared by the appellate tribunal.
Finally, Supreme Court is the last resort for anyone seeking redressal for GST penalties or any other tax order. As per the penalty provisions under GST, Supreme Court’s judgement on penalties, jail sentences or fines are final.
These strict penalty provisions for GST were brought in order to prevent widespread tax evasion and corruption. In case you have any query related to GST laws, feel free to contact Enterslice.
Read our article: Checklist of Different Types of Reviews / Audit in GST
Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on corporate law. He is a creative thinker and has a great interest in exploring legal subjects.
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