Offences are most significant part of any act which provides a stick to the law for its smooth functioning and implementation. Here, are the various offences and penalties under GST.

Offences and penalties under GST Law:

A taxable person who –

(i) supplies any goods or services without an issue of any invoice or false invoice with regard to any such supply

(ii) issues invoice or bill without a supply of goods or services in violation of the provisions/rules of the act

(iii) collects any tax amount but fails to pay that amount to the credit of the appropriate authority beyond a period of 3 months from the date of which such payment becomes unpaid

(iv) fails to deduct the tax as sub-sections:

  • Section 37(1) TDS (Tax deducted at sources):

To deduct revenue at the rate of 1% from the payment made or credited to the supplier referred as ‘the deductee’ of taxable goods and services, notified by a Central or State Government by recommendations of the Council, in which the total value of supply, under a contract, exceeds by Rs.10 lakh.

  • Section 43C: Collection of tax at source

In this act, memorandum of understanding, every electronic commerce operator herein referred as the ‘operator’ shall, at the time of credit of a amount to the account of the supplier or at the time of payment of any amount in cash or through any other mode, whichever is before, collect an amount, out of the total amount paid to the supplier and representing consideration to the supply of goods or services made by it.

Calculation of rate as may be notified on behalf of Central/State Government as per the recommendation of the Council

  • utilizes input tax credit without actual receipt of product or services either fully or partially
  • obtaining the fraudulent refund of any CGST/SGST under this act;
  • takes/distributes input tax credit in violation of section 17, or the rules made under that.
  • falsifies the financial records or produces fake accounts or furnishes false documents, return, or information with an intention to evade payment of tax due.
  • liable to register under this rule but fails to obtain registration
  • furnishes any false details with regard to particulars marked as mandatory at the time of applying for registration process or subsequently
  • obstructs or prevents any officer in the discharge of his duty under this rule
  • transportation of any taxable goods without the cover of documents as may be described
  • suppresses the turnover leading to evasion of tax.
  • fails to maintain the books of account and other documents in accordance with the provisions the rules made under the act
  • transportation of any goods which has a reason to be liable to confiscation under this act.
  • issues a false invoice or information by using the identification no. of another taxable person
  • disposal off or tampers with any materials that have been seized, detained, or attached under this act, then there will be a penalty of Rs. 10,000 or an amount equivalent to the tax evaded, the tax not deducted or short deducted or deducted but not paid to the Government or input tax credit availed of or distributed irregularly, or the refund claimed fraudulently, whichever the case is higher.

Other offences and penalties:

 Any person who aids or abets any of the above offences specified in clauses and sub-section shall:

  • acquires possession of, or concerns himself in transporting, eliminating, depositing, retaining, concealing, supplying, or buying or in any other manner deals with any goods in which the person is liable to confiscation under this act.
  • receives or supply of services in any way or in any other manner deals with, which has a reason to believe are in contravention of any provisions of this rules under this act.
  • fails to appear before the CGST/SGST officer, when issued with a summon for appearance to provide evidence or produce a data in an enquiry.
  • Fails to issue account for an invoice in the book of account in accordance with this provisions shall be liable to a penalty which may extend to Rs 25,000.

Any person, who contravenes any of the provisions of this act for which no penalty is separately provided, would also be liable to a penalty which may extend to RS 25 thousand. Offences and penalties provided in GST Law are likely to be rational and transparent that will decrease the litigation provided.

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