GST Offences: Penalty Amount for Different Types of Offence

GST Offences

As a business person, you must be aware of the consequences, if you don’t comply with laws. Penalties for different GST Offences have been listed down in section 122 of the GST Act. The amount of penalty varies according to the type and severity of offence. Let’s take a look at different offences and penalties for committing those offences.

Non Filing of GST Return

If you fail to file GST Return, you will end up paying Rs.100 per day of delay until the failure continues, but not exceeding Rs.5000.

Example, you did not file the return for 60 days, then penalty should be Rs 100*60 = Rs 6,0000/-, but since, maximum penalty is Rs 5,000/-, you will have to bear a maximum penalty of Rs 5,000/-. But, but, but, interest on late payment of GST will still be charged at 18% p.a.

After the levy of penalty, if any entity having GST registration continuously fails to file GST returns, the GST registration would be cancelled and all the amount due would become payable, as assessed by a GST Officer.

Penalty of Rs.10,000/-

The following types of GST Offences attract a penalty of Rs.10,000 or tax evaded/ tax not deducted/ collected or short deducted /collected or tax deducted/ collected but not paid, whichever is higher:

  1. Supplies any goods/ services:
    1. Without issue of any tax invoice
    2. Issues an incorrect/ false invoice in respect of such supply
  2. Issues an invoice without supply of goods/ services in violation of the provisions of the Act/ Rules.
  3. Collects any amount as tax but fails to deposit the same with the Government beyond a period of three months from due date.
  4. Collects any tax in contravention of law but fails to deposit the same with the Government beyond a period of three months from due date.
  5. Fails to deduct tax/ deduct appropriate tax, as per Section 51 (Section 51 is applicable to certain specific persons. The said section requires such specified persons to deduct tax at the rate of one per cent out of the payment to the supplier if the value of supply under a contract exceeds two lakhs and fifty thousand rupees) or deposit the tax deducted with the Government.
  6. Takes or utilizes input tax credit without actual receipt of goods/ services either fully or partially in contravention of provisions of Act/ Rules.
  7. Fraudulently obtains refund of tax.
  8. Distributes tax credit in contravention of law.
  9. With an intention to evade payment of tax:
    1. Falsifies or substitutes financial records, or
    2. Produces fake accounts or documents, or
    3. Furnishes any false information or return
  10. Fails to obtain GST registration or furnishes any false information regarding registration particulars, either at the time of applying for registration, or subsequently.
  11. Transports any taxable goods without the cover of specified documents suppresses his turnover leading to evasion of tax
  12. Fails to keep, maintain or retain books of account and other documents as specified in law.
  13. Fails to furnish information or documents called for by an officer or furnishes false information or documents during any proceedings.
  14. Supplies, transports or stores any goods which he has reason to believe are liable to confiscation.
  15. Issues any invoice or document by using the registration number of another taxable person tampers with, or destroys any material evidence or document disposes off.
  16. Tampers with any goods that have been detained, seized, or attached under this Act.
  17. Disposes off or tampers with any goods that have been detained, seized, or attached under this Act.

GST Penalty of Rs.25,000

The general penalty of Rs.25000 for GST Offences can be imposed on any person who contravenes to any of the provisions of the Act or rules. Specifically, the Rs.25,000 penalty will be applicable for any persons who:

  1. Aids or abets any of the offences specified above.
  2. Acquires possession of, or in any way concerns himself in transporting, removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner deals with any goods which he knows or has reason to believe are liable to confiscation.
  3. Receives or is in any way concerned with the supply of, or in any other manner deals with any supply of services which he knows or has reason to believe are in contravention of any provisions of this Act or the rules made thereunder.
  4. Fails to appear before the officer of central tax, when issued with a summon for appearance to give evidence or produce a document in an enquiry fails to issue invoice in accordance with the provisions of this Act or rules made thereunder.
  5. Fails to account for an invoice in his books of account.

Reduction in Penalty

Penalty can be levied for the above GST Offences at a reduced rate of 10% of the tax amount involved, subject to minimum of Rs.10,000 wherein tax was not paid or short paid by reasons other than fraud or wilful misstatement or suppression of facts to evade tax.

In case of fraud or wilful misstatement or suppression of facts to evade tax, the penalty of 100% of the tax involved subject to a minimum of Rs.10,000 will be applicable.

While some GST Offences levy penalties and interests, other GST Offences have imprisonment as well. Know those offences here.  So, pay GST on time, file returns on time and comply with all the laws. If you need help, Moneyम्जी can help you, but don’t end up being penalized or imprisoned. Call us at +91-9711730497 or mail us at info@moneymji.com.

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