Question 2 - What is meant by the term penalty - FAQ on GST dated 21.9.2016 based on Draft Model GST

Q 2. What is meant by the term penalty? Ans. The word penalty has not been defined in the MGL but judicial pronouncements and principles of jurisprudence have laid down the nature of a penalty as: a temporary punishment or a sum of money imposed by statute, to be paid as punishment for the commission of a certain offence; a punishment imposed by law or contract for doing or failing to do something that was the duty of a party to do.