Annual Tax Conference, 2017 Kolkata Branch of EIRC of ICAI

Annual Tax Conference, 2017 Kolkata Branch of EIRC of ICAI
S. Venkataramani Chartered Accountant August 12, 2017

Agenda… Assessment Appeals and revision Offences & Penalties

ASSESSMENTS Chapter – XII of CGST Act

Meaning of ‘Assessment’
Section 2(11): “Assessment” means determination of tax liability under this Act and includes self-assessment, re-assessment, provisional assessment, summary assessment and best judgement assessment; Assessment Self Assessment S. 59 Scrutiny of Returns S. 61 Assessment of unregistered persons S. 63 Provisional Assessment S. 60 Assessment of non-filers of returns S. 62 Summary assessment in certain special cases S. 64

Self Assessment Applicable to all registered persons
Assessment of tax liability to be made by the dealer himself Furnishing of return for each tax period is mandatory Tax period means period for which return is to be filed Tax period = Monthly / Quarterly

Provisional Assessment
Taxable person is unable to determine the value of supply, or the applicable rate of tax Requests the Proper Officer in writing, to permit him to pay tax on a provisional basis, giving reasons for the same Execute a bond with surety/security as the Proper Officer deems fit - for payment of differential tax on final assessment, if any Proper Officer demands information required for finalising the assessment Proper Officer passes final Assessment Order * Final Tax > Tax on Provisional basis Pay balance tax (+) Not exceeding 18% Interest on differential for the period: Due date – Actual date of payment Tax on Provisional basis > Final Tax Refund (+) Not exceeding 6% Interest (if not refunded within 60 days)

Provisional Assessment - Timeline
Registered person makes an application for provisional assessment Proper officer shall pass an order for making provisional payment within 90 days from the date of receipt of request Within 6 months, pass an order for final assessment Proper Officer passes final Assessment Order Additional/Joint Commissioner Increase time period upto 6 months Commissioner Further increase time period upto 4 years

Seeks explanation for the taxable person
Scrutiny of returns Proper Officer scrutinizes the return & related particulars to verify the correctness Related particulars to be furnished by the taxable person to facilitate verification Proper Officer notices discrepancies on scrutiny Seeks explanation for the taxable person Taxable person offers satisfactory explanation within 30 days* Taxable person offers NO satisfactory explanation within 30 days, or After accepting discrepancies, fails to take corrective measures in time No Action Proper Officer may Initiate appropriate action including those under Sections 65/ 66/ 67, or proceed to determine tax and other dues under Section 73 or 74. *30 days of being informed by Proper Officer or such further period as may be permitted by him

Assessment of non-filers of returns
Registered taxable person fails to furnish return u/s 39 or 45 Proper Officer serves Notice u/s 46 Failure continues > 15 days after service of Notice Proper Officer concludes best judgment assessment: To assess the tax liability of the said person Taking into account all the relevant material available with or gathered by him Taxable person furnishes a valid return within 30 days of service of Order The Order passed by Proper Officer is deemed withdrawn

Assessment of unregistered person
Taxable person fails to obtain registration/ Fails to pay balance tax pending on cancellation of registration Proper Officer proceeds to assess the tax liability to the best of his judgment, for the relevant tax periods to which tax dues relate Proper Officer to issue show cause notice and offer the taxable person, reasonable opportunity of being heard Proper Officer to pass Assessment Order

Summary Assessment in doing so
Evidence showing a tax liability of a person comes to the notice of Proper Officer Proper Officer to take prior permission of Additional/ Joint Commissioner Proper Officer proceeds to assess the tax liability* Sufficient grounds to believe that any delay will adversely affect the interest of revenue Proper Officer to pass Assessment Order to recover tax not paid Taxable person makes application within 30 days of receipt of Order Additional/ Joint Commissioner considers that such Order is erroneous, he may withdraw such Order and follow the procedure laid down u/s 73 or 74 . in doing so * Where taxable person to whom the liability pertains is not ascertainable, and such liability pertains to supply of goods, the person in charge of such goods shall be deemed to be the taxable person

Appeals and Revision Chapter – XVIII of CGST Act

Appeals to FAA [Section 107]
The following provisions are applicable to both CGST and SGST/UTGST laws: Any person aggrieved by any decision/ order passed against him by an adjudicating authority, may appeal to FAA Time limit to file appeal: 3 months from date on which decision/ order was communicated to the person preferring the appeal. If FAA is satisfied that sufficient cause is shown, time period extended by 1 month (applicable to both CGST and SGST/UTGST law) No appeal shall be filed unless the applicant has deposited an amount as provided below: Amount of tax, interest, fine, fee & penalty, as is admitted, in full under the order Pre-deposited a sum equal to ten percent of the remaining amount of tax under dispute

Appeals to FAA... Section 107(2): For the purpose of satisfying himself as to the legality/ propriety of the decision/ order, the Commissioner of GST may :- On his own motion, call for and examine record of any proceeding in which adjudicating authority has passed any decision/ order Direct (by order) any GST Officer subordinate to him to apply to the FAA within 6 months from the date of communication of the order /decision for the determination of points arising out of the same. Section 107(3): Where such subordinate officer makes an application to FAA, it will be dealt with as if it were an appeal made against decision/ order of adjudicating authority and provisions relating to appeals will apply

Appeals to FAA… The FAA:-
Shall give an opportunity to the appellant of being heard May adjourn hearing if sufficient cause is shown – reasons to be recorded in writing Not more than 3 times to a party during hearing of the appeal May allow appellant to add any ground of appeal not specified in the grounds of appeal if he is satisfied that omission of the ground was not wilful/ unreasonable

Appeals to FAA… Shall pass an order confirming/ modifying/ annulling the decision/ order after making necessary inquiry. No order against which an appeal is made shall be referred back to the adjudicating authority that passed the said order However, an order having the following effect shall be passed only on giving the appellant an opportunity of being heard:- Enhancing fee Enhancing penalty Enhancing fine in lieu of confiscation/ confiscating goods of greater value Reducing the amount of refund/ ITC

Appeals to FAA… Order disposing the appeal shall: Be in writing and
State the points for determination, the decision and reasons for decision. Communicate such order to appellant, respondent and adjudicating authority

Appeals to FAA… Hear and decide every appeal within a period of 1 year from date on which it is filed Only where it is possible to do so Where issuance of order is stayed by order of Court/ Tribunal, time period of such stay to be excluded A copy of order passed by FAA shall also be sent to jurisdictional Commissioner of CGST/ SGST or authorities designated by them in this behalf

Section 108: Revisionary powers
Section 108(1): The Commissioner may:- On his own motion or upon information received by him or upon request from the commissioner of state/union territory Call for and examine the record of any proceeding, and Stay the operation of such decision/ order for such period as he deems fit if: he considers that any decision/ order passed by any officer subordinate to him is erroneous in so far as it is prejudicial to the interest of the revenue, illegal or does not consider material facts and Pass an order as he deems fit, including enhancing/ modifying/ annulling the said decision or order After giving the person concerned an opportunity of being heard After making any further inquiry

Revisionary powers of Commissioner…
Section 108(2): The Commissioner shall not exercise any power under sub- Section (1) :- If order has been subject to an appeal u/s 107 or 112 or 117 or 118 or Period for filing appeal has not expired 3 years has expired after the order is passed The order has already been taken for revision at an earlier stage The order has already been revised once

Constitution of Appellate Tribunal (Central)
National Bench Regional Bench National Bench to be headed by a President Situated at New Delhi Shall have Regional Benches - President - Members (Technical –CGST) - Members (Technical –SGST) Constitute such number as may be required by notification - Judicial Member - Members (Technical –CGST) - Members (Technical –SGST)

Constitution of Appellate Tribunal (State)
State Bench Area Bench State Bench to be headed by a State President Constituted in Each State Constitution of Area Benches - Judicial Member - Members (Technical –CGST) - Members (Technical –SGST) Constituted on request of the State Government - Judicial Member - Members (Technical –CGST) - Members (Technical –SGST)

Section 112: Appeals to AT The following provisions are applicable to both CGST and SGST laws: Any person aggrieved by an order passed against him u/s 107 or 108 may appeal to the AT AT may at its discretion, refuse to admit appeal where: amount of tax/ ITC involved or difference in tax/ ITC involved or fine/ fee/ penalty determined by such order does not exceed 50,000 rupees Time limit to file appeal: Within 3 months from date on which order is communicated to any person preferring the appeal. Time period of 3 months may be extended by AT if it is satisfied that there was sufficient cause for delay

Appeals to Appellate Tribunal…
The party against whom appeal has been preferred: Shall file memorandum of cross-objections within 45 days of receipt of the notice Time period of 45 days may be extended by AT if it is satisfied that there was sufficient cause for delay An appeal shall be in the prescribed form, verified in the prescribed manner and accompanied by prescribed fee

Appeals to Appellate Tribunal…
No appeal to AT shall be filed unless appellant has deposited an amount- Amount of tax, interest, fine, fee & penalty, as is admitted, in full computed as provided in Section 107 (i.e., 10% already paid to FAA) Pre-deposit of 20% of the remaining amount under dispute in addition to amount paid u/s 107

Appeals to Appellate Tribunal...
Section 112(2): For the purpose of satisfying himself as to the legality/ propriety of the decision/ order, Commissioner of GST may :- On his own motion, call for and examine record of any proceeding in which Appellate/Revisional authority has passed any decision/ order Direct any GST Officer subordinate to him to apply to the AT within 6 months from the date of communication of the order /decision for the determination of points arising out of the same. Section 112(3): Where such subordinate officer makes an application to AT, it will be dealt with as if it were an appeal made against decision/ order of Appellate/Revisional authority and provisions relating to appeals will apply

Orders passed by Appellate Tribunal
The following provisions are applicable to both CGST and SGST laws: The AT may :- Pass such orders as it thinks fit, confirming, modifying/ annulling the decision or order After giving the parties an opportunity of being heard Refer the case back to FAA/ revisional authority/ original adjudicating authority with directions for fresh adjudication/ decision, after taking additional evidence into consideration, if necessary If sufficient cause is shown, AT may grant time to the parties and adjourn the hearing (maximum 3 adjournments) for reasons recorded in writing

Orders passed by Appellate Tribunal…
The AT may amend any order passed by it:- To rectify any mistake apparent on the face of the record If such mistake is noticed own its accord/ brought to its notice by Commissioner/ Commissioner of State tax or UT /other party to the appeal within 3 months from the date of the order. No amendment which has the effect of:- Enhancing assessment or Reducing refund or ITC or Otherwise increasing liability of the party Shall be made unless notice has been given to such person and he has been allowed a reasonable opportunity of being heard

Orders passed by Appellate Tribunal…
Time limit to hear and decide appeals: 1 year from date on which appeal is filed (where possible to do so) AT shall send a copy of every order passed under this section to :- FAA/ revisionary authority/ original adjudicating authority (as the case may be) The appellant, The jurisdictional Commissioner of CGST and the jurisdictional Commissioner of SGST/UTGST Every order passed by the AT shall be final – subject to Sections 117/118 Note: Section 115 read with Section 113 Where an amount deposited by an appellant is required to be refunded consequent to any order of the Appellate Tribunal :- Interest at the rate specified u/s 56 shall be payable From the date of payment of the amount till the date of refund

Procedures The powers and functions of the AT may be exercised and discharged by Benches In case of a vacancy, a Bench of 2 members can hear an appeal after approval of the President/State President However, a single member Bench with the President’s approval can decide on an appeal: Not involving any question of law and Where the amount is < 5 lakhs Amount = Tax or ITC involved/ difference therein/ the amount of fine/ fee/ penalty involved

Procedures If the members of a Bench differ in opinion on any point(s)
The point(s) shall be decided based on majority When there is no majority (i.e., members are equally divided): They shall state the point(s) on which they differ The National/State President shall refer the case for hearing to 1 or more of the other members of the respective Bench: Decision based on majority of these members, including those who first heard it

Procedures Shall be guided by principles of natural justice in disposing any proceeding. The AT shall have the same powers as are vested in a civil court under CPC when trying a suit in respect of the following matters:- Discovery and production of documents; Summon and enforce attendance of any person and examine him on oath; Requisition any public record or document Dismiss a representation or pass ex-parte judgement Issuing commissions for examination of witnesses/documents receiving evidence on affidavits Setting aside any order passed by it Any other matter as may be prescribed

Authorised representative…
Any person who is entitled/ required to appear before a GST Officer/ FAA/ AT may appear by an authorized representative; unless he is required to appear personally for examination on oath / affirmation – Subject to other provisions of this Section For the purposes of this Section, “authorised representative” means a person authorised by the above-mentioned person to appear on his behalf, being:- His relative or regular employee; or An advocate who is entitled to practice in any court in India, and who has not been debarred from practicing before any court in India; or Any CA, a cost accountant or a CS, who holds a valid certificate of practice and who has not been debarred from practice; or Retired officer of the Commercial tax department having held a rank of Group-B gazetted officer or above for at least 2 years GST Practitioner of the registered person

Section 117: Appeals to High Court
The commissioner of GST/ any party aggrieved by an order passed by the State Bench or Area Benches of the Appellate Tribunal u/s 112 may file an appeal to HC The HC may admit such appeal if it is satisfied that the case involves a substantial question of law, and shall formulate that question No appeal shall lie before the HC against order passed by National Bench or Regional Bench An appeal shall be:- Filed within 180 days from date on which order appealed against is received by commissioner/ other party Extension of time period allowed if HC is satisfied that there was sufficient cause for delay

Appeals to HC… When an appeal has been filed before the HC, it shall be:- Heard by a bench of not less than 2 Judges of the HC, and Decided in accordance with the opinion of such Judges or of the majority, if any, of such Judges. Where there is no such majority :- The Judges shall state the point(s) of law upon which they differ and The case will then be heard on that point(s) only, by one or more of the other Judges of the HC and Such point(s) shall be decided according to the opinion of the majority of the Judges who have heard the case including those who first heard it.

Section 118: Appeals to SC An appeal shall lie to the SC from:-
Any judgment/ order passed by the HC in an appeal made u/s 117 when: The HC certifies the case to be a fit one for appeal to the SC: Any order passed by the National Bench or Regional Benches of the Appellate Tribunal u/s 112 where the appeal does not lie before the HC as specified in Section 117

Appeal not to be filed in certain circumstances
The Board/ SG may issue orders/ instructions/ directions fixing such monetary limits as it may deem fit: For the purpose of regulating the filing of appeal/ application by the GST officer under this Chapter On the recommendation of the Council Where the GST officer has not filed an appeal/ application in pursuance of such orders, etc. (as above).:- He will not be precluded from filing appeal/ application in any other case involving the same or similar issues or questions of law No party in appeal/ application shall contend that the GST officer has given his agreement on the disputed decision by not filing an appeal or application The AT or Court hearing such appeal/ application shall have regard to circumstances under which appeal/ application was not filed by GST officer in pursuance of such orders, etc. (as above)

Non-appealable decision and orders
No appeal shall lie against any decision taken/ order passed by a GST officer, which relates to any one or more of the following matters:- An order of the Commissioner/ other competent authority for transfer of proceeding from one officer to another An order pertaining to the seizure/ retention of books of account, register and other documents An order sanctioning prosecution under the Act An order passed u/s 80 (relating to payment of tax and other amounts in instalments)

Offences and Penalties Chapter – XIX of CGST Act, 2017

Offences and Penalties
Nature of Offence Penalty / Interest / Others Supply without issue of invoice Penalty shall be higher of the following: 1. Rs 10000/- 2. Tax evaded 3. Tax not deducted 4. Tax which is short deducted 5. Tax which is short collected 6. Tax collected but not paid to the Govt. 7. Input tax credit availed irregularly 8. Input tax credit distributed irregularly 9. Refund claimed fraudulently Any person who aids or abets any such offence shall be liable to a penalty which may extend to Rs.25000/- Issue of False or incorrect invoice Issue of invoice without supply Tax collected not remitted to the Government within 3 months of the payment becoming due Failure to pay to the government, tax which is collected in contravention of the said Act Non Deduction or short deduction of Tax at source Failure to remit tax deducted at source to the government Failure to collect tax at source or tax collected at a lower rate

Offences and Penalties…
Nature of Offence Penalty / Interest / Others Failure to remit Tax collected at source to the government Penalty shall be higher of the following: 1. Rs 10000/- 2. Tax evaded 3. Tax not deducted 4. Tax which is short deducted 5. Tax which is short collected 6. Tax collected but not paid to the Govt. 7. Input tax credit availed irregularly 8. Input tax credit distributed irregularly 9. Refund claimed fraudulently Any person who aids or abets any such offence shall be liable to a penalty which may extend to Rs.25000/- Avails / Utilises Input tax credit without actual receipt of goods/services Fraudulently obtain refund of tax Distribution of ITC by ISD in contravention of the provisions of the Act and/or rules Falsification of financial records, accounts, documents Furnishing any false information/return with an intention to evade taxes Failure to obtain registration by a person liable to be registered

Nature of Offence Penalty / Interest / Others Furnishing false registration particulars at the time of registration Penalty shall be higher of the following: 1. Rs 10000/- 2. Tax evaded 3. Tax not deducted 4. Tax which is short deducted 5. Tax which is short collected 6. Tax collected but not paid to the Govt. 7. Input tax credit availed irregularly 8. Input tax credit distributed irregularly 9. Refund claimed fraudulently Any person who aids or abets any such offence shall be liable to a penalty which may extend to Rs.25000/- Obstruct / Prevent any officer from discharging his duty Transporting goods without documents Suppression of turnover Failure to keep, maintain or retain books of accounts and/or documents as per the provisions Supplies, transports or stores goods liable to confiscation Issue of invoice/document using the registration number of another registered person

Nature of Offence Penalty / Interest / Others Tampers / destroys any material evidence or documents Penalty shall be higher of the following: 1. Rs 10000/- 2. Tax evaded 3. Tax not deducted 4. Tax which is short deducted 5. Tax which is short collected 6. Tax collected but not paid to the Govt. 7. Input tax credit availed irregularly 8. Input tax credit distributed irregularly 9. Refund claimed fraudulently Any person who aids or abets any such offence shall be liable to a penalty which may extend to Rs.25000/- Disposing / tampering with goods detained, seized or attached

Nature of Offence Penalty / Interest/ Others Remarks Non payment / Short payment/erroneous refund/ITC wrongly availed or utilised by a registered supplier of goods or services Penalty to be higher of : 1. Rs.10000/- 2. Tax due In case of fraud, wilfull mis-statement, suppression of fact to evade tax 2. 10% of Tax due Reason not being fraud, wilfull mis-statement, suppression of fact to evade tax

Nature of Offence Penalty / Interest / Others Acquires possession, transports, removes, deposits, keeps, conceals, supplies, purchases, deals, with goods which he knows or believes is liable to confiscation shall be liable to a penalty which may extend to Rs.25000/- Receives, deals or is in any way concerned with supply of services which he knows or believes is in contravention of the respective Acts / Rules Failure to appear before the officer when issued with a summon for appearance to give evidence / produce document in an inquiry Fails to issue an invoice in accordance with the provisions of the Act or fails to account for an invoice

Nature of Offence Penalty / Interest / Others Failure to furnish information return within the period specified in the notice Rs.100/- for every day of the period during which such failure continues Failure to furnish information or return or wilfully furnishes false information (for collection of statistics) - Fine which may extend to Rs.10000/- - In case of continuing offence a further fine which may extend to Rs.100 for each day after the 1st day during which the offence continues subject to max limit of Rs.25000/ Contravention of any of the provisions of the Act / Rules for which no penalty has been separately prescribed (General Penalty) Penalty which may extend to Rs.25000/-

Nature of Offence Penalty / Interest / Others Supplies or receives goods in contravention of the Act or Rules with an intent to evade payment of tax - All such goods and conveyances shall be liable to confiscation - Person shall be liable to penalty u/s 122 Fails to account for goods on which he liable to pay tax Supplies goods liable to tax without obtaining registration Contravenes any provisions of this Act or rules with an intent to evade payment of tax Uses any conveyance as a means of transport for carriage of goods in contravention of the Act

Imprisonment Nature of Offence Penalty / Interest / Others
Supply without issue of invoice Shall be punishable with: if the tax evaded or the ITC wrongly availed or utilised or refund wrongly taken exceeds Rs 5 crores, imprisonment for a period which can extend to 5years and fine if the tax evaded or the ITC wrongly availed or utilised or refund wrongly taken exceeds Rs 2 crores but less than 5 crores, imprisonment for a period which can extend to 3 years and fine if the tax evaded or the ITC wrongly availed or utilised or refund wrongly taken exceeds Rs 1 crore but less than 2 crores, imprisonment for a period which can extend to 1 year and fine Issue of invoice without supply Tax collected not remitted within 3 months from payment becoming due Avails / Utilises Input tax credit without actual receipt of goods/services Fraudulently obtain refund of tax Falsification of financial records, accounts, documents

Imprisonment… Nature of Offence Penalty / Interest / Others
Furnishing any false information/return with an intention to evade taxes Shall be punishable with: if the tax evaded or the ITC wrongly availed or utilised or refund wrongly taken exceeds Rs 5 crores, imprisonment for a period which can extend to 5years and fine if the tax evaded or the ITC wrongly availed or utilised or refund wrongly taken exceeds Rs 2 crores but less than 5 crores, imprisonment for a period which can extend to 3 years and fine if the tax evaded or the ITC wrongly availed or utilised or refund wrongly taken exceeds Rs 1 crore but less than 2 crores, imprisonment for a period which can extend to 1 year and fine Furnishing any false registration particulars at the time of registration

Imprisonment… Nature of Offence Penalty / Interest / Others
Acquires possession, transports, removes, deposits, keeps, conceals, supplies, purchases, deals, with goods which he knows or believes is liable to confiscation* Shall be punishable with: if the tax evaded or the ITC wrongly availed or utilised or refund wrongly taken exceeds Rs 5 crores, imprisonment for a period which can extend to 5years and fine if the tax evaded or the ITC wrongly availed or utilised or refund wrongly taken exceeds Rs 2 crores but less than 5 crores, imprisonment for a period which can extend to 3 years and fine if the tax evaded or the ITC wrongly availed or utilised or refund wrongly taken exceeds Rs 1 crore but less than 2 crores, imprisonment for a period which can extend to 1 year and fine Receives, deals or is in any way concerned with supply of services which he knows or believes is in contravention of the respective Acts / Rules* Failure to furnish information return within the period specified in the notice* Failure to furnish information or return (in the nature of statistics) or wilfully furnishes false information*

Imprisonment Nature of Offence Penalty / Interest / Others
Falsification of financial records, accounts, documents Shall be punishable with imprisonment for a period which may extend to 6 months or with fine or both Obstruct / Prevent any officer from discharging his duty Tampers / destroys any material evidence or documents

Cognizable and Non-bailable offences
The following offences are Cognizable and non-bailable if the tax evaded or the ITC wrongly availed or utilised or refund wrongly taken exceeds Rs 5 crores: Supply without issue of invoice Issue of invoice without supply Tax collected not remitted within 3 months of the payment becoming due Avails/Utilises Input tax credit without actual receipt of goods/services

General disciplines related to penalty
Section not applicable where penalty is a fixed sum or fixed percentage Penalty imposed to: Depend on facts & circumstances of the case Be commensurate with the degree/ severity of breach Authority shall not impose substantial penalties for minor breaches of tax regulations/ procedural requirements (tax involved is Rs.5,000 or less) Penalty order can be passed only on Issuing a SCN Giving the person a reasonable opportunity of being heard Specifying therein, the nature of the breach and, the applicable law/ regulation/ procedure under which the penalty (amount or range) for the breach is prescribed.

Detention of goods and conveyances Sec 129
Transportation or storage of goods in contravention of the provisions – all goods, conveyance and documents liable for detention / seizure; Detained goods / conveyance to be released – where owner of goods come forward: Taxable goods: On payment of applicable tax + interest + penalty (equal to 100% of tax); Exempt goods: Least of 2% of the value of goods or Rs. 25,000; Or on furnishing a security equivalent to the above amount; Detained goods / conveyance to be released – where owner of goods does not come forward: Taxable goods: On payment of applicable tax + interest + penalty (equal to 50% of tax); Exempt goods: Least of 5% of the value of goods or Rs. 25,000; Order to be passed after giving personal hearing

Confiscation of goods and levy of penalty – Sec 130
Goods would be liable for confiscation and penalty under section 122 where any person: Supplies goods in contravention of provisions, leading to evasion of GST, OR Does not account for goods liable to tax Supplies goods liable to tax, without applying for registration Contravention of any provisions with intent to evade tax Conveyance is used as a means to transport goods in contravention of the provisions (if not proved by the owner otherwise) In the above cases, option to pay a fine in lieu of confiscation to be given to the owner (or where he is not known, to the person from whom such goods are seized) Fine would be as the officer deems fit (but limited to the market value of the goods less tax), and additional tax & other charges to apply On confiscation, title to vest in the appropriate Government Confiscation order to be passed only on issue of SCN and giving the person a reasonable opportunity of being heard

Offences by companies – Sec 137
In case of offences committed by any company under GST: The Company and every person in charge/responsible for the conduct of the business shall be deemed to be guilty of the offence and shall be liable to the proceedings and punishable; Every company having committed an offence under the GST Law and it is proved that the offence is committed with the consent or connivance or any negligence by any director or officer of the company, then such persons shall be deemed to be guilty of that offences and shall be liable for any proceedings under the GST Law; Every partnership firm or a LLP or HUF or a trust which has committed an offence under the GST Law, then the partner or Karta or managing trustee shall be deemed to be guilty of the offence and shall be liable to the proceedings and punishable; No person shall be punished if he proves that the offence was committed without his knowledge or that he has exercised all due diligence to prevent such offence.

Compounding of offences – Sec 138
The commissioner can compound any offences under the GST Law either before or after the prosecution on payment to the Central Government or the State Government by a person accused of the offence; No compounding of offence in case of – A person who has been allowed to compound once in respect of the offences specified in Section 132; A person who has been allowed to compound once in respect of certain offences under the CGST/SGST/UTGST/ IGST Law for value of supplies exceeding Rs 1cr; A person who has been accused of committing an offence under the GST Law which is also an offence under any other law which is in force; A person who is convicted for an offence under GST Law by a court; A person who has been accused of committing an offence specified in Section 132; Any other class of persons or offences;

Compounding of offences…
Any compounding allowed under GST Law shall not affect the proceedings instituted under any other law; Any compounding shall be allowed only after making payment of tax, interest and penalty involved in the offenses; The amount for compounding of offenses shall be as follows– On payment of compounding amount, no further proceedings shall be initiated under GST Law in respect of the same offence and any criminal proceedings, if already initiated in respect of said offence, shall stand abated; Min amount not to be less than Max amount not to be less than Rs.10000/- Rs /- 50% of the tax involved (whichever is higher) 150% of the tax involved

Anti-Profiteering Measure – Sec 171
(1) Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices. (2) The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him. (3) The Authority referred to in sub-section (2) shall exercise such powers and discharge such functions as may be prescribed.

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Annual Tax Conference, 2017 Kolkata Branch of EIRC of ICAI

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