Penalty for certain offences [ Section 122 ] - GST Ready Reckoner - GST

Penalty for certain offences As per section 122 Offences involving issue of fake/wrong invoices (1) Where a taxable person: i. Supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice with regard to any such supply, ii. Issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act or the rules made thereunder, iii. avails input tax credit using such invoice or bill referred to in (ii) above ITC iv. issues invoices using the GST identification number of another bonafide taxable person Offences involving evasion and/or non-payment of tax v. Collects any amount as tax, but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due; vi. evades tax, fraudulently avails ITC or fraudulently obtains refund, where such offence or refund is not covered under (i) to (iv) above. vii. collects any tax in contravention of the provisions of this Act but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due; viii. fails to deduct the tax in accordance with the provisions of section 51(1) , or deducts an amount which is less than the amount required to be deducted under the said subsection, or where he fails to pay to the Government under sub-section (2) thereof, the amount deducted as tax; ix. fails to collect tax in accordance with the provisions of section 52(1) , or collects an amount which is less than the amount required to be collected under the said sub-section or where he fails to pay to the Government the amount collected as tax u/s 52(3); x. takes or utilises input tax credit without actual receipt of goods or services or both either fully or partially, in contravention of the provisions of this Act or the rules made thereunder; xi. takes or distributes input tax credit in contravention of Section 20 (distribution of ITC by Input Service Distributor) or rules made thereunder Offences involving commission of fraud xii. fraudulently obtains refund of tax under this Act or falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information or return with an intention to evade payment of tax due under the GST laws. xiii. suppresses his turnover leading to evasion of tax under this Act xiv. supplies, transports or stores any goods which he has reasons to believe are liable to confiscation under this Act; xv. tampers with, or destroys any material evidence or document xvi. disposes off or tampers with any goods that have been detained, seized, or attached under this Act liable to be registered under this Act but fails to obtain registration; xvii. furnishes any false information with regard to registration particulars, either at the time of applying for registration, or subsequently Other miscellaneous offences xviii. obstructs or prevents any officer in discharge of his duties under this Act xix. transports any taxable goods without the cover of documents as may be specified in this behalf xx. fails to keep, maintain or retain books of account and other documents in accordance with the provisions of this Act or the rules made thereunder; xxi. fails to furnish information or documents called for by an officer in accordance with the provisions of this Act or the rules made thereunder or furnishes false information or documents during any proceedings under this Act; he shall be liable to pay a penalty of, higher of the following a) Rs. 10,000/- or b) an amount equivalent to, any of the following the tax evaded or the tax not deducted under section 51 or short deducted or deducted but not paid to the Government or tax not collected under section 52 or short collected or collected but not paid to the Government or input tax credit availed of or passed on or distributed irregularly, or the refund claimed fraudulently, Penalties, fines and prosecution under GST laws The penalties leviable under the CGST Act, 2017 are summarised as under: As Per section 122(1A) 122(1B) 1A) Any person who retains the benefit of a transaction covered under clauses (i), (ii), (vii) or clause (ix) of section 122(1) and at whose instance such transaction is conducted, shall be liable to a penalty of an amount equivalent to the tax evaded or input tax credit availed of . [ Section 122(1A) ] (1B) Any electronic commerce operator who [ Any electronic commerce operator, who is liable to collect tax at source under section 52 Substituted vide Finance (No. 2) Act, 2024 , w.e.f. 01.10.2023] [shall come into force w.e.f. 01.11.2024 vide N.No. 17/2024 dated 27.09.2024] allows a supply of goods or services or both through it by an unregistered person other than a person exempted from registration by a notification issued under this Act to make such supply; allows an inter-State supply of goods or services or both through it by a person who is not eligible to make such inter-State supply; or fails to furnish the correct details in the statement to be furnished under section 52(4) of any outward supply of goods effected through it by a person exempted from obtaining registration under this Act, shall be liable to pay a penalty of, higher of the following 10,000/- rupees, or an amount equivalent to the amount of tax involved had such supply been made by a registered person other than paying tax under section 10. [ Section 122(1B) , Inserted by F.A. 2023 ) Penalty for supply of goods/service for non/short payment of tax etc. As per Section 122(2 ) any registered person who supplies any goods or services or both on which tax has not been paid or short-paid or erroneously refunded, or where the input tax credit has been wrongly availed or utilised: (a) for any reason, other than the reason of fraud or any wilful misstatement or suppression of facts to evade tax, shall be liable to a penalty equal to, Higher of the following Rs. 10,000/- or 10 % of the tax due from such person (b) for reason of fraud or any wilful misstatement or suppression of facts to evade tax, shall be liable to a penalty equal to, Higher of the following Rs. 10,000/- or the tax due from such person Penalty for aiding or abetting of offences As per Section 122(3) ,any person who commits any of the following offences shall be liable to a penalty which may extend to Rs. 25,000/- :- aids or abets any of the 21 offences specified in clauses (a) or 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 reasons to believe are liable to confiscation under this Act or the rules made thereunder; 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 reasons to believe are in contravention of any provisions of this Act or the rules made thereunder; 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 inquiry