GST Penalty Amount for Different Types of Offence

Section 122 of the GST Act provides for different types of penalty for offences under GST. Based on the type of offence, the amount of penalty and the type of penalty varies. In this article, we look at the GST penalty amount for different types of offences.

Penalty Amount for Not Filing GST Return

The GST penalty for not filing GST returns is Rs.100 per day of delay until the failure continues, but not exceeding Rs.5000. After the levy of penalty, if any entity having GST registration continuously fails to file GST returns, the GST registration would be cancelled and all the amount due would become payable, as assessed by a GST Officer.

GST Penalty of Rs.10,000

The following types of offences attract a penalty of Rs.10,000 or tax evaded/ tax not deducted/ collected or short deducted /collected or tax deducted/ collected but not paid, whichever is higher:

1. Supplies any goods/ services:
   1. Without the issue of any tax invoice
   2. Issues an incorrect/ false invoice in respect of such supply
2. Issues an invoice without the supply of goods/ services in violation of the provisions of the Act/ Rules.
3. Collects any amount as tax but fails to deposit the same with the Government beyond a period of three months from the due date.
4. Collects any tax in contravention of law but fails to deposit the same with the Government beyond a period of three months from the due date.
5. Fails to deduct tax/ deduct appropriate tax, as per Section 51 (Section 51 is applicable to certain specific persons. The said section requires such specified persons to deduct tax at the rate of one per cent out of the payment to the supplier if the value of supply under a contract exceeds two lakh and fifty thousand rupees) or deposit the tax deducted with the Government.
6. Takes or utilizes input tax credit without actual receipt of goods/ services either fully or partially in contravention of provisions of Act/ Rules.
7. Fraudulently obtains refund of tax.
8. Distributes tax credit in contravention of the law.
9. With an intention to evade payment of tax:
   1. Falsifies or substitutes financial records, or
   2. Produces fake accounts or documents, or
   3. Furnishes any false information or return
10. Fails to obtain GST registration or furnishes any false information regarding registration particulars, either at the time of applying for registration, or subsequently.
11. Transports any taxable goods without the cover of specified documents suppresses his turnover leading to evasion of tax
12. Fails to keep, maintain or retain books of account and other documents as specified in law.
13. Fails to furnish information or documents called for by an officer or furnishes false information or documents during any proceedings.
14. Supplies, transports or stores any goods which he has reason to believe are liable to confiscation.
15. Issues any invoice or document by using the registration number of another taxable person tampers with or destroys any material evidence or document disposes of.
16. Tampers with any goods that have been detained, seized, or attached under this Act.
17. Disposes of or tampers with any goods that have been detained, seized, or attached under this Act.

Reduced Penalty

A penalty can be levied for the above offences at a reduced rate of 10% of the tax amount involved, subject to a minimum of Rs.10,000 wherein tax was not paid or short paid by reasons other than fraud or wilful misstatement or suppression of facts to evade tax. In case of fraud or wilful misstatement or suppression of facts to evade tax, the penalty of 100% of the tax involved subject to a minimum of Rs.10,000 will be applicable.

GST Penalty of Rs.25,000

The GST general penalty of Rs.25000 can be imposed on any person who contravenes to any of the provisions of the Act or rules. Specifically, the Rs.25,000 penalty will be applicable for any persons who:

• Aids or abets any of the offences specified above.
• 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 reason to believe are liable to confiscation.
• 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 reason 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 enquiry fails to issue the invoice in accordance with the provisions of this Act or rules made thereunder.
• Fails to account for an invoice in his books of account