Category: Offences and Penalties under GST

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What constitutes Culpable mental state

Culpable mental state includes
(a) Intention
(b) Motive
(c) Knowledge of the fact
(d) Belief in or reason to believe a fact

(ICAI FAQ PUBLICATIONS 06-09-2017 Cognizance of offences, Presumption of culpable mental state and Relevancy of statements under certain circumstances: FAQ NO. 35)

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Is culpable mental state necessary for prosecution

Yes. In any prosecution for an offence under this Act which requires a culpable mental state on the part of the accused, the Court shall presume the existence of culpable mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution.

(ICAI FAQ PUBLICATIONS 06-09-2017 Cognizance of offences, Presumption of culpable mental state and Relevancy of statements under certain circumstances: FAQ NO. 34)

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Can inferior Courts take cognizance of any offence without prior sanction of the competent authority

No Court shall take cognizance of any offence punishable except with the previous sanction of the Commissioner, and no Court inferior to that of a Magistrate of the First Class, shall try offence mentioned in Section 132.

(ICAI FAQ PUBLICATIONS 06-09-2017 Cognizance of offences, Presumption of culpable mental state and Relevancy of statements under certain circumstances: FAQ NO. 33)

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Whether persons other than assessee could also be prosecuted under the CGST Act, 2017

Yes. In terms of the Section 133 the following persons would be liable for prosecution for the offences specified below:

Persons liable for prosecution Nature of offence Prosecution
1.Person engaged in connection with the collection of statistics under section 151

2.Person engaged in compilation or computerisation thereof or if any officer of central tax having access to information specified under sub-section (1) of section 150,

3.If any person engaged in connection with the provision of service on the common portal or the agent of common portal,

 wilfully discloses any information or the contents of any return furnished under this Act or rules made thereunder otherwise than in execution of his duties under the said sections or for the purposes of prosecution for an offence under this Act or under any other Act for the time being in force, The guilty person shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to twenty-five thousand rupees, or with both

(ICAI FAQ PUBLICATIONS 06-09-2017 Punishment for Certain Offences: FAQ NO. 30)

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Whether tax evaded under State GST Act or IGST Act would also be taken in to account for the purpose of the prosecution

Yes. In terms of explanation to Section 132 the term tax has been defined to include amount of tax evaded or the amount of input tax credit wrongly availed or utilised or refund wrongly taken under the provisions of this Act, the State Goods and Services Tax Act, the Integrated Goods and Services Tax Act or the Union Territory Goods and Services Tax Act and cess levied under the Goods and Services Tax (Compensation to States) Act.

(ICAI FAQ PUBLICATIONS 06-09-2017 Punishment for Certain Offences: FAQ NO. 29)

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What are cognizable and non-cognizable offences

Cognizable and Non-bailable Non-cognizable`
Following offences which attract imprisonment which may extend to 5 years would be cognizable and non bailable in terms of Section 132(5):

1) Making a supply without issue of an invoice or grossly mis-declaring the description of the supply on invoice, in contravention of this Act, to intentionally evade tax ;

2) Issues any invoice or bill without supply in violation of the provisions of this Act/rules made thereunder leading to wrongful availment of credit or refund of tax

3) Avails input tax credit using such invoice or bill referred to above;

4) Collects any amount as tax but fails to pay the same to the credit of the Government beyond a period of three months from the date on which such payment becomes due;

 All other offences specified under Sec 132 apart from those mentioned as cognizable/non bailable shall be non-cognizable/ bailable in terms of Section 132(4)

(ICAI FAQ PUBLICATIONS 06-09-2017 Punishment for Certain Offences: FAQ NO. 27)