1. GST: Offences & Penalties
Surat Chapter of WIRC of ICAI
Dated 08/07/2017
A Presentation by
CMA. (Dr.) Shailendra Saxena  
B.COM,SAP(FICO),ACS,FCMA,FCA,DISA(ICAI).Ph.D.

2. GST
OFFENCES

3. Offences by Taxable Person
Offences relating to invoices
Supplies any goods and/or services without issue of any invoice or
Issues an incorrect or false invoice with regard to any such supply;
Issues any invoice or bill without supply of goods and/or services
Collection and Non Payment of taxes
Collects tax but fails to pay the same within 3 month from due date of payment
Collects tax in contravention of provisions of GST and fails to pay the same within 3 month from due date of payment
TDS & TCS
Fails to deduct tax, deducts lower tax, fails to pay tax deducted
Fails to collect tax, collects lower tax, fails to pay tax collected

4. Offences by Taxable Person
ITC
Avails and/or utilizes ITC without actual receipt of goods and/or services either fully or partially, in violation of the provisions of this Act, or the rules made thereunder;
Refund
Fraudulently obtains refund of any CGST/SGST under this Act;
ISD
Avails or distributes ITC in violation of S. 20
Registration
Is liable to be registered under this Act but fails to obtain registration;
Furnishes false information at the time of registration or subsequently

5. Offences by Taxable Person
Falsification/ Cooking of Records
Falsifies or substitutes financial records or produces fake accounts and/or documents or furnishes any false information or return with an intention to evade payment of tax due under this Act;
Obstruction to Officers 
Obstructs or prevents any officer in discharge of his duties
Handling of Goods 
Transports taxable goods without the cover of documents
Supplies, transports or stores any goods which he has reason to believe are liable to confiscation
Suppression 
Suppression of turnover leading to evasion of tax

6. Offences by Taxable Person
Books of Accounts 
fails to keep, maintain or retain books of account and other documents 
Proceedings before officer 
fails to furnish information and/or documents called for by a CGST/SGST officer 
furnishes false information and/or documents during any proceedings 
Impersonation 
issues any invoice or document by using the identification number of another taxable person 
Tampering
 tampers with, or destroys any material evidence 
disposes off or tampers with any goods that have been detained, seized, or attached

7. GST
PENALTIES

8. Penalty NOT LEVIABLE IN Certain CIRCUMSCHANCES
Lenient view in case of bonafide or technical lapses ( Not deliberately in defiance of law)
Hindusthan Steel v. State of orissa 2 ELT(J159)(SC)
No penalties if there are conflicting and divergent views (Indifference of opinion between two benches of CESTAT/H.C)
CCE Vs. Sudarshan Cable industries (2012)76 ELT 300
No penalties if the matter referred to Larger bench
Marsha Pharma Pvt.Ltd 2009 (248) ELT 687 (Tri.Ahmedabd)
No penalties for difference in interpretation (Due to repeated amendments in CCR2004, huge litigation in country)
Maruti Suzuki Ltd v. CCE ELT 641(SC)
No penalties for clerical error. (Detected and corrected by assessee him self before detection by department)
Dabur (P) Ltd 1982 ELT 480,DCW Ltd v.CCE 1996(81) ELT381
No penalties for incorrect classification of goods (Between Importer & Department)
Bahar Agrochem v.CCE (2012)277 ELT 382 (CESTAT)

9. Sec. 122(1) Penalty for Certain Offences
A Taxable person shall be liable to pay penalty of higher of below
Rs /- or
An amount of tax evaded or
TDS not deducted / short deducted / deducted but not paid to the Government or
TCS not collected / short collected / collected but not paid to the Government or
ITC availed / passed on / distributed irregularly or
Refund claimed fraudulently

10. Sec. 122(1) Penalty for Certain Offences
Offences for Penalty
Supplies without issue of invoice or incorrect / false invoice
Issue invoice/bill without supply
Collects tax but fails to pay to Govt. beyond a period of 3 months from the date it becomes due
Collects tax in contravention but fails to pay to Govt. beyond a period of 3 months from the date it becomes due
Fails to deduct TDS / short deducted / deducted but not paid to the Government
Fails to collect TCS / short deducted / deducted but not paid to the Government
ITC without actual receipt of Goods & Service either fully or partially

11. Sec. 122(1) Penalty for Certain Offences
Fraudulently obtains refund of tax
Takes/Distributes ITC in contravention of Sec. 20 or rules
Falsifies/substitutes financial records or produces fake accounts/documents or false information or return with an intention of evade tax
Fails to obtain registration
Furnishes False information at the time of registration
Obstructs/Prevent officer in discharge of his duties
Transports any taxable goods without the cover of documents
Suppresses Turnover to evade tax
Fails to keep, maintain or retain books of accounts and other documents

12. Sec. 122(1) Penalty for Certain Offences
Fails to furnish or Furnishes false information or documents
Supplies, transport or stores any goods which are liable to confiscation.
Issues any invoice or document by using registration number of another registered person.
Tampers with or destroys any material evidence or document
Disposes off or tampers with any goods that have been detained, seized or attached.

13. Sec. 122(2) Penalty for Certain Offences
Any Registered Person who supplies any G & S on which any tax has not been paid or short paid or erroneously refunded or where ITC has been wrongly availed or utilised –
For any reason other than fraud or wilful misstatement or suppression of facts to evade tax
shall be liable to a penalty of Rs /- or 10% of tax due whichever is higher
In case of fraud or wilful misstatement or suppression of facts to evade tax
shall be liable to penalty of Rs /- or 100% of tax due whichever is higher

14. Sec. 122(3) Penalty for Certain Offences
A Taxable person shall be liable to a penalty which may be extend to Rs. 25,000/- in following offences
Aids or abets any of the offences specified in clauses (i) to (xxi) of Section 122(1)
Acquires possession of or in any way concerns himself in transporting, removing, depositing, keeping etc any goods which are liable to confiscation.
Receives or supplies any services which are in contravention.
Fails to appear before officer in case of summon
Fails to issue invoice or fails to account for an invoice in the books of accounts.

15. Sec. 123 Penalty for Failure to furnish Information Return
If a person, who is required to furnish Information Return u/s 150(1), fails to submit the Information Return within period specified u/s 150(3) (i.e. within 90 days from notice) shall be liable to pay penalty of :
Rs. 100 per day subject to maximum of Rs. 5000/-
Person u/s 150(1) being:
> Taxable person, Local Authority, Authority of State Govt, Income Tax Authority, Banking Company, State Electricity Board, Any Registering authority, Collector, Recognised Stock Exchange, Depository, RBI Officer, GSTN, Person having UIN, Any other person specified by the Govt.

16. Sec. 124 Fine for failure to furnish Statistics Sec
Sec. 124 Fine for failure to furnish Statistics Sec. 125 General Penalty
124. If any person fails to furnish or wilfully furnishes false information or return as required u/s 151
shall be punishable with A fine of Rs. 10,000/-
Which may extend to Rs. 100/- per day subject to Max. of Rs ,000/-
125. General Penalty – Maximum of Rs /- for contravention for any of the provision & Rules which no separate penalty provided.

17. Sec. 126 General Disciplines related to penalty
No Penalty for minor breaches of tax regulations or procedural requirements, any omission or mistake in documentation which is rectifiable and made w/o fraudulent intent or gross negligence.
Expl. a) minor breach – tax involved < Rs. 5000/-
b) omission or mistake rectifiable – apparent from record.
Depend on facts & circumstances and degree & severity of breach
No Penalty – without reasonable opportunity of being heard.
Officer shall specify the nature of breach and applicable law, regulation or procedure under which breach has been specified.
Voluntary disclosure by person – may consider the fact.
This section shall not apply where penalty is either fixed sum or expressed as a fixed %

18. Sec. 127 Power to impose penalty in certain cases Sec
Sec. 127 Power to impose penalty in certain cases Sec. 128 Waiver of Penalty or Fees or both
127. Officer may impose such penalty (after giving reasonable opportunity of being heard) in cases not covered by:
Sec Assessment of Non Filers of Returns
Sec Assessment of Unregistered Persons
Sec Summary Assessment in certain special cases
Sec Determination of Tax etc in cases other than fraud etc.
Sec Determination of Tax etc in cases of fraud etc.
Sec 129- Detention, Seizure and release of goods and conveyances in transit
Sec 130- Confiscation of goods or conveyances
128. Govt may by notification waive in full or part any
penalty, fees or both

19. Sec. 129 Detention, Seizure & Release of Goods and conveyance in transit
Goods or Conveyance detained or seized shall be released
Where owner of goods comes forward for payment - on payment of applicable tax and penalty equal to 100% of tax, (in case of exempted goods, 200% of value of goods or Rs /- whichever is less)
Where owner of goods does not come forward for payment - on payment of applicable tax and penalty equal to 50% of the value of goods reduced by Tax amount paid thereon, (in case of exempted goods, 5% of value of goods or Rs /- whichever is less)
Upon furnishing security equivalent to clause a or b
No Detention or Seizure without serving an order for the same.

20. Sec. 129 Detention, Seizure & Release of Goods and conveyance in transit
Shall be released, on a provisional basis, upon execution of a bond or furnishing of a security or on payment of tax, interest and penalty.
Proper Officer shall issue a notice and then pass an order for payment of tax and penalty.
No tax, interest of penalty without reasonable opportunity of being of heard.
On Payment all proceeding shall be concluded.
Fails to pay tax & penalty within 7 days – further proceeding u/s 130
Provided if goods are perishable or hazardous or depreciable 7 days may be reduced.

21. Sec. 130 Confiscation and Levy of Penalty
Goods or conveyance shall be confiscated and penalised u/s 122 if :
Supplies or received any goods with intent to evade tax.
Does not account taxable goods
Supplies any goods without having applied for registration
Contravenes any of the provision to evade tax
Uses any conveyance as means of transport for carriage of goods in contravention of the provision of this Act or Rules.
On confiscation of goods – option to pay fine
Fine shall not exceed market value of goods less tax chargeable
Fine and Penalty shall be less than penalty leviable u/s 129(1)

22. Sec. 130 Confiscation and Levy of Penalty
Owner of the conveyance shall be given an option to pay fine equal to tax payable on the goods being transported thereon
In addition to fine liable to pay tax, penalty and charges
No order for confiscation or imposition of penalty – without giving opportunity of being heard
On confiscation title of such goods or conveyance shall vest in the Government
The proper officer may dispose of the confiscated goods or conveyance and deposit the sale proceed with the Government.

23. Sec. 132 Punishment Offences for Punishment
Supplies without issue of invoice or incorrect / false invoice
Issue invoice/bill w/o supply, leading to wrong ITC Credit
ITC without actual receipt of G &/ S either fully or partially
Collects tax but fails to pay to Govt. beyond a period of 3 months from the date it becomes due
Evades tax, Fraud ITC Credit or Fraud refund not covered by above.
Falsifies/substitutes financial records or produces fake accounts/documents or false information or return with an intention of evade tax

24. Sec. 132 Punishment
Obstructs/Prevent officer in discharge of his duties
Acquires possession of or in any way concerns himself in transporting, removing, depositing etc any goods liable for confiscation
Received or concerned with supply of goods or services which are in contravention of the provision of the Act or Rules.
Tampers with or destroys any material evidence or documents
Fails to furnish or Furnishes false information or documents
Attempts to commit or abets the commission of any of the offences mentioned in clauses (a) to (k) of this section.

25. Sec. 132 Punishment If the Tax Evasion, Wrong ITC, Wrong Refund
Exceeds Rs. 500 Lakh
With up to 5 years imprisonment and with fine
Exceeds Rs. 200 Lakh but not exceed Rs. 500 Lakh
With up to 3 years imprisonment and with fine
Exceeds Rs. 100 Lakh but not exceed Rs. 200 Lakh
With up to 1 year imprisonment and with fine
Commits or abets the commission of an offence specified in clause (f) or (g) or (j)
With up to 6 months imprisonment or with fine or with both
Offences under clause a, b, c, d and i are cognizable and non bailable.
Offences under clause e, f, g, h, j, k and l are non cognizable and bailable.

26. Sec. 134 Cognizance of offences
No Court shall take cognizance of any offence under this Act or 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 offences

27. Sec. 137 Offences by companies
Offence committed by company, Firm, LLP, HUF or Trust, every person/ partner / karta or managing trustee who, at the time of offence was committed was in charge of and was responsible to the company etc, as well as company etc shall be deemed to be guilty and liable for proceeding and punishment. Offence committed with consent or connivance of or is attributable to any negligence on the part of any director, manager, secretary or other office of the company, liable for proceeding and punishment.

28. Sec. 138 Compounding of Offences
(1) Any offence under this Act may, either before or after the institution of prosecution, be compounded by the Comm. on payment, by the person accused of the offence, to the CG or SG, of such compounding amount in such manner as may be prescribed: Provided that nothing contained in this section shall apply to— (a) a person who has been allowed to compound once in respect of any of the offences specified u/s 132(1) clause (a) to (f) and (l) (b) a person who has been allowed to compound once in respect of any offence, other than those in clause (a), under this Act or under the provisions of any S/UT GST Act or IGST Act in respect of supplies of value exceeding one crore rupees;

29. Sec. 138 Compounding of Offences
(c) 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; (d) a person who has been convicted for an offence under Act by a court; (e) 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 (f) any other class of persons or offences as may be prescribed: Provided further that any compounding allowed under the provisions of this section shall not affect the proceedings, if any, instituted under any other law: Provided also that compounding shall be allowed only after making payment of tax, interest and penalty involved in such offences.

30. THANKS!!
Any Questions ?
Contact for post sessionquery: CMA. (Dr.) Shailendra Saxena
Bharuch
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