Penalty Under Section 125 of CGST Act, Goods and Services Tax - GST

[NILESH PITALE]

Dear Expert

In GST Audit Case, Auditing Officer has Imposed Penalty U/s 125 for Non-Filling of ITC-04, On the Other Hand From inception of GST Era We are Very Prompt and Diligent in Paying taxes & Filling of the Returns, Mere Lapse of Filling of ITC 04 can be cause for invocation of Section 125

Please Guide.

Posts / Replies

[RaamSrinivasan Kalpathi]

There is no specific penalty for non-filing or belated filing of ITC-04 and hence the Suptt. has chosen to levy general penalty u/s.125 (max amt being 25k X 2 per year).  If the amount of levy is insignificant it would be better to buy peace by paying up.  Else, the demand can be contested for a lesser value considering that ITC-04 has no revenue implications on the department.

Also, to be practical, GST audit u/s.65 is like unsheathing of the sword.  Dept has to see blood for the sword to be sheathed back.  The Suptt whosoever came  for audit has to show some revenue collection, else, he would stand scrutiny before the GCM (group comittee mettings of ACs).  As there was no other adverse findings he has very conveniently chosen Sec.125.  

If the Suptt has charged the  maximum penalty please consider filing an Appeal with FAA.  You may take a call based purely on the quantum of penalty.

Thanks

[Sadanand Bulbule]

In terms of Rule 45 [3] of the CGST Rules, filing of ITC-04 is mandatory, irrespective  of number of change of hands in the chain of such transactions. Invocation of Section 125 depends upon the  prudence of the AO.