Punishment for certain offences Section 132 - GST Ready Reckoner - GST

Punishment for certain offences Punishment for certain offences [ section 132 read with section 138 of CGST Act Read with rule 162 of CGST Rules ] As per section 132 (1) Whoever commits, or causes to commit and retain the benefits arising out of, any of the following 9 offences mentioned shall be liable to penalty given in the matrix below: (a) supplies any goods or services or both without issue of any invoice , in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax; (b) 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 leading to wrongful availment or utilisation of input tax credit or refund of tax; (c) avails input tax credit using the invoice or bill referred to in clause (b) or fraudulently avails input tax credit without any invoice or bill ; (d) 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; (e) evades tax or fraudulently obtains refund and where such offence is not covered under clauses (a) to (d) above; (f) falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information with an intention to evade payment of tax due under this Act; (g) obstructs or prevents any officer in the discharge of his duties under this Act; (omitted by F.A. 2023 w.e.f 01.10.2023) (h) 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; (i) 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 contravenetion of any provisions of this Act or the rules made thereunder; (j) tampers with or destroys any material evidence or documents; (omitted by F.A. 2023 w.e.f 01.10.2023) (k) fails to supply any information which he is required to supply under this Act or the rules made thereunder or (unless with a reasonable belief - the burden of proving which shall be upon him - that the information supplied by him is true) supplies false information; or (omitted by F.A. 2023 w.e.f 01.10.2023) (l) attempts to commit, or abets the commission of any of the offences mentioned in clauses (a) to (k) (substituted by F.A. 2023 w.e.f 01.10.2023) clauses (a) to (f) and clauses (h) and (i) of this section, Person(s) committing any of the offences mentioned at (a) to (l) above, shall be punishable: Clauses of section 132(1) Description of offence Period of imprisonment (i) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds five hundred lakh rupees (Rs 5 crore); with imprisonment for a term which may extend to five years and with fine ; (ii) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds two hundred lakh rupees (Rs 2 crore), but does not exceed five hundred lakh rupees (Rs 5 crore), with imprisonment for a term which may extend to three years and with fine (iii) in the case of any other offence (substituted by F.A. 2023 w.e.f 01.10.2023) an offence specified in clause (b) where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds one hundred lakh rupees (Rs 1 crore), but does not exceed two hundred lakh rupees (Rs 2 crore), with imprisonment for a term which may extend to one year and with fine (iv) in cases where he commits or abets the commission of an offence specified in clause (f): falsification of substitution of financial records or production of fake account or document) or clause (g): obstruction or prevention of any officer in the discharge of his duties under this Act; or clause (j)tampering with or destruction of any material evidence or documents; (omitted by F.A. 2023 w.e.f 01.10.2023) he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both Person convicted of an offence under this Act is again convicted liable to imprisonment for every subsequent offence As per the provision of Section 132 (2) , where any person convicted of an offence under this section is again convicted of an offence under this section, then he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to five years and with fine. Cognizable and non- bailable offences (i.e. in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds five hundred lakh rupees (Rs 5 crore ) of that sub-section shall be cognizable and non-bailable. As Per Section 132(5) (6) The list of cognizable and non-bailable offences is given below : (a) Supply of any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax; (b) Issues of 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 leading to wrongfulavailment or utilisation of input tax credit or refund of tax; (c) Availing of input tax credit using the invoice or bill referred to in clause (b) or fraudulently availing input tax credit without any invoice or bill; (d) Collection of any amount as tax but failing to pay the same to the Government beyond a period of three months from the date on which such payment becomes due; Except for these four offences involving tax fraud of five crore rupee or more, all other offences under this Act, shall be non- cognizable and bailable. This is notwithstanding anything contained in the Code of Criminal Procedure, 1973. Compounding offences [ Section 138 of CGST Act read with Rule 162 of CGST Rules ] Determination of Compounding amount [ Rule 162(3A) ] (w.e.f. 01.10.2023) The Commissioner shall determine the compounding amount under rule 162(3A) as per the Table below:- S. No. Offence Compounding amount if offence is punishable under clause (i) of section 132(1) Compounding amount if offence is punishable under clause (ii) of section 132(1) 1 Offence specified in clause (a) of section 132(1) of the CGST Act Subject to Maximum amount Up to 75% of the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken, subject to minimum amount of 50% of such amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken. Subject to Maximum amount Up to 60% of the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken, Subject to minimum amount of 40% of such amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken. 2 Offence specified in clause (c) of section 132(1) of the CGST Act 3 Offence specified in clause (d) of section 132(1) of the CGST Act 4 Offence specified in clause (e) of section 132(1) of the CGST Act 5 Offence specified in clause (f) of section 132(1) of the CGST Act Amount equivalent to 25% of tax evaded. Amount equivalent to 25% of tax evaded. 6 Offence specified in clause (h) of section 132(1) of the CGST Act 7 Offence specified in clause (i) of section 132(1) of the CGST Act 8 Attempt to commit the offences or abets the commission of offences mentioned in clause (a), (c) to (f) and clauses (h) and (i) of section 132(1) of the CGST Act Amount equivalent to 25% of such amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken. Amount equivalent to 25% of such amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken. Provided that where the offence committed by the person falls under more than one category specified in the Table above, the compounding amount, in such case, shall be the amount determined for the offence for which higher compounding amount has been prescribed. Case Law PANKAJ MEHTA VERSUS SUPERINTENDENT (ANTI EVASION) CENTRAL GOODS AND SERVICE TAX( 2023 (3) TMI 269 - PUNJAB AND HARYANA HIGH COURT) Issues: Anticipatory bail for petitioner in a complaint under GST Acts Facts: Allegations of wrongly availing ITC of about Rs. 7.00 crores Final decision: Interim order granting anticipatory bail made absolute, subject to conditions under Section 438 Cr.P.C.