GST – Penalties, Offences & Appeals
Goods and Services Tax Act, 2017 has within its ambit certain provisions to ensure compliance with the law and regulation. Non-compliance is certain to bring regulatory actions including levy of fines, penalties, late fees, and interest. This necessitates the timely GST filing as well as GST reconciliation to ensure proper disclosure of transactions. However, what are the provisions for penalties under the GST law? Here is a complete guide to the GST penalties and offences as well as provisions for appeal under the GST law.
Penalties under the GST
GST law recognizes 21 major offences that are classified herewith based on their nature:
Invoice Related Offences
1. Issuing invoice or bill without undertaking supply
2. Issuing invoice or bill by using GSTIN of another registered person
3. Supplying without invoice or by issuing incorrect/false invoice
Tax Payment Related Offences
4. Not paying tax amount collected for a period exceeding 3 months
5. Not paying tax amount collected for a period exceeding 3 months in contravention of the CGST/SGST Act
6. Non-deduction, lower deduction or not depositing TDS under section 51
7. Non-collection, lower collection, or non-payment of TCS under section 52
8. Utilizing/Availing GST Input Tax Credit without actual receipt of goods and/or services
9. Availment or distribution of ITC by an ISD in contravention of Section 20
10. Availing of any refund of tax fraudulently
11. Suppression of turnover
Information and Records Related Offences
12. Substitution or falsification of financial records, furnishing fake documents or accounts or furnishing false information/ return with an intent of tax evasion.
13. Failure to maintain documents or accounts as specified in the act or retain them for the specified period.
14. Failure to furnish documents and information as per the act/rules as required by the officer or furnishing false documents or information during the course of any proceedings.
15. Destroying or tampering with any material document/evidence
16. Preventing as well as obstructing any official in the discharge of his duties
Registration related offences
17. Not obtaining registration despite being liable to pay tax
18. Furnishing false information either at the time of registration application or subsequently
Transportation of Goods Related Offences
19. Goods transportation without accompanying prescribed documents
20. Storing/transporting/supplying any goods liable to confiscation
21. Tampering or disposing of goods attached/seized/detained under the act
The amount of GST penalty for the above offences shall be Rs. 10,000 or the amount equal to the following as applicable for the offences concerned:
- Tax evaded
- TDS not deducted, short deducted, or deducted but not paid to the Government under section 51
- TCS not collected, short collected, or collected but not paid to the Government under section 52
- ITC availed of/passed on/distributed irregularly
- Fraudulently claiming refund
Further, in case of the offences covered under clauses 1, 2, 7, and 9, the person who retains the benefits of the transactions and who has undertaken the transaction shall be liable to a penalty equal to the amount of tax evaded or ITC availed or passed on.
Late Return Filing Fees and Interest
As per the current, late fees levied on late filing of returns, in case of late filing of GSTR-3B, then a late fee of Rs. 25 per act is levied. That means a total of Rs. 50 (Rs. 25 for CGST Act + Rs. 25 for SGST Act) is levied each day beginning after the due date till the return is furnished. However, in the case of NIL GST return filing, this late fee reduces to Rs. 20 per day (Rs. 10 CGST Act + Rs. 10 SGST Act).
Apart from the late fees, interest @ 18% per annum shall be paid for delayed payment of tax to the government. If you are wondering how to pay late fees in GST, then the portal automatically computes GST late fees in subsequent GST returns.
Blocking of Returns
If the GST returns for previous tax periods are not filed, then the GST portal blocks the further filing of GST returns until previous GST returns are filed.
Non-fraudulent and fraudulent offences
If a registered person:
● Supplies any goods or services on which tax has not been paid or short paid or erroneously refunded or
● Where the ITC has been wrongly availed of or utilized,
then the amount of GST penalty shall be as under
|Reason of Offence||Penalty|
|Reason other than fraud, wilful misstatement, or suppression of facts in order to evade tax||Higher of Rs 10,000 or 10% of the tax due from such a person |
|Reason of fraud, wilful misstatement, or suppression of facts in order to evade tax||Higher of Rs 10,000 or Tax amount due|
Arrest under GST
In case of commission of serious offences, GST law has put in place the provisions authorizing the arrest of the person committing such offences. The arrest provisions are primarily applicable for offences listed under section 132 of the CGST Act, 2017. The arrested person shall be informed of the grounds of arrest.
A person not satisfied with an order passed against them can prefer an appeal against such an order. The same thing applies to the GST department wherein they can prefer an appeal to the higher authorities against an order which was passed against the department. The chain of authorities for appeal are as under:
- Order Passed by the Adjudicating Authority
- Appellate Authority
- Appellate Tribunal
- High Court
- Supreme Court
Above were the snapshots of offences under the GST law. while these were the most common offences under the law, certain other offences are also prescribed that can attract stringent penalties in case of non-compliance. From penalty for late payment of GST to arrest provisions, it becomes increasingly important to ensure proper and timely compliance with GST law in order to avoid such penal consequences.WeP, with its comprehensive GST software, facilitates your complete compliance with the law. Its MIS report generation supports the comparison and avoids mismatches in transactions and reports. To ensure that all the returns are aligned and matched, GST reconciliation can be performed with ease through the WeP GST Platform. GST Return filing is not a one-time exercise but monthly compliance that should be adhered to for being tax compliant. Therefore, avoid penalties under GST with WeP as your Tax Partner providing you all-round GST service.