Category: Offences and Penalties under GST

In order to release the goods / documents or conveyance the proper officer shall issue a notice specifying the tax payable and thereafter, pass an order for payment of tax and penalty as detailed above after giving reasonable opportunity of hearing to the concerned person.
On payment of the amount referred to above, all liabilities under this section shall stand discharged in respect of such goods and such conveyance

(ICAI FAQ PUBLICATIONS 06-09-2017 Detention, seizure and release of goods and conveyances in transit : FAQ NO. 16)

The goods/ conveyance could be released under the following circumstances:
(a) on payment of the applicable tax and penalty equal to 100% of the tax payable on such goods, and in case of exempted goods on payment of an amount equal to 2% of the value of goods or twenty-five thousand rupees, whichever is less where the owner of the goods comes forward for payment of such tax and penalty;
(b) on payment of the applicable tax and penalty equal to the fifty percent of the value of the goods reduced by the tax amount paid thereon, and, in case of
exempted goods, on payment of an amount equal to five per cent. of the value of goods or twenty-five thousand rupees, where the owner of the goods does not come forward for payment of such tax and penalty.
(c) upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed:
Provided that no such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods.

(ICAI FAQ PUBLICATIONS 06-09-2017 Detention, seizure and release of goods and conveyances in transit : FAQ NO. 15)

Where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of the GST Act or rules made there under, all such goods and the conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyances shall be liable to detention or seizure.

(ICAI FAQ PUBLICATIONS 06-09-2017 Detention, seizure and release of goods and conveyances in transit : FAQ NO. 14)

In terms of Section 128 the Government may, by notification, waive in part or full, any penalty referred to in section 122 or section 123 or section 125 or any late fee referred to in section 47 for such class of taxpayers and under such mitigating circumstances as may be specified therein on the recommendations of the Council.

(ICAI FAQ PUBLICATIONS 06-09-2017 General disciplines related to penalty, General Penalty and Waiver of penalty : FAQ NO. 13)

Section 125 of the CGST Act, provides for general penalty which may extend to ` 25,000/- on any person, who contravenes any of the provisions of this Act or any rules made there under. This penalty would be applicable only where no penalty is separately provided for in this Act

(ICAI FAQ PUBLICATIONS 06-09-2017 General disciplines related to penalty, General Penalty and Waiver of penalty : FAQ NO. 12)

In terms of Section 126(5) where a person voluntarily discloses to a tax authority the circumstances of a breach of the tax law, regulation or procedural requirement prior to the discovery of the breach by the tax authority, the tax authority may consider this fact as a potential mitigating factor when quantifying a penalty for that person.

(ICAI FAQ PUBLICATIONS 06-09-2017 General disciplines related to penalty, General Penalty and Waiver of penalty : FAQ NO. 11)

In terms of explanation to Section 126(1), a breach shall be considered a ‘minor breach’ if the amount of tax involved is less than five thousand rupees.

(ICAI FAQ PUBLICATIONS 06-09-2017 General disciplines related to penalty, General Penalty and Waiver of penalty : FAQ NO. 10)

The general guidelines to be followed while imposing penalties are as under:
 Substantial penalties shall not be imposed for minor breaches of tax regulations or procedural requirements.
 No penalty in respect of any omission or mistake in documentation which is easily rectifiable and obviously made without fraudulent intent or gross negligence shall be greater than necessary to serve merely as a warning.
 The penalty imposed shall depend on the facts and circumstances of the case and shall commensurate with the degree and severity of the breach.

(ICAI FAQ PUBLICATIONS 06-09-2017 General disciplines related to penalty, General Penalty and Waiver of penalty : FAQ NO. 9)

Yes, If a person who is required to furnish an information return under section 150 fails to do so within the period specified in the notice issued under sub-section (3) thereof, the proper officer may direct that such person shall be liable to pay a penalty of ` 100 for each day of the period during which the failure to furnish such return continues However, the penalty imposed under this section shall not exceed ` 5,000/-. Similarly, if any person who is required to furnish any information or return under section 151,—
(a) without reasonable cause fails to furnish such information or return as may be required under that section, or
(b) wilfully furnishes or causes to furnish any information or return which he knows to be false, then, he shall be punishable with a fine which may extend to ten thousand rupees and in case of a continuing offence to a further fine which may extend to ` 100 for each day after the first day during which the offence continues subject to a maximum limit of ` 25,000.

(ICAI FAQ PUBLICATIONS 06-09-2017 Penalty for failure to furnish information or failure to furnish statistics : FAQ NO. 8)

Yes, any activity pertaining to aiding or abetting the offence would be an offence attracting a penalty to the extent of ` 25,000/-. Further, in terms of Section 122(3) following offences shall also be punishable with a penalty to the extent of ` 25,000/-:
(a) 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 under this Act or the rules made thereunder;
(b) 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 there under;
(c) 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;
(d) fails to issue invoice in accordance with the provisions of this Act or rules made there under, or fails to account for an invoice in his books of account;

(ICAI FAQ PUBLICATIONS 06-09-2017 Penalty for certain offences: FAQ NO. 7)