Term Offences and Penalties under GST

Posted on 10 June 2022 Category : GST terms

What is Offences and Penalties under GST

This post explains about Offences and Penalties under GST.

Offences and Penalties under GST

Goods and service tax GST will bring in “One nation one tax “to unite indirect taxes under one umbrella and facilitate Indian businesses to be globally competitive. The Indian GST is structured for efficient tax collection, reduction in corruption, easy inter-state movement of goods etc.

To prevent tax evasion and corruption, the GST Law lists the offences and penalties. There are 21 offences under GST, apart from the penalty for availing compounding by a taxable person who is not eligible for it.

Offences under GST

Fake/wrong invoices

A taxable person supplies any goods/services without any invoice or issues a false invoice.
He issues any invoice or bill without supply of goods/services in violation of the provisions of GST
He issues invoices using the identification number of another bonafide taxable person

Fraud

He submits false information while registering under GST
He submits fake financial records/documents or files fake returns to evade tax
Does not provide information/gives false information during proceedings

Tax evasion

He collects any GST but does not submit it to the government within 3 months
Even if he collects any GST in contravention of provisions, he still has to deposit it to the government within 3 months. Failure to do so will be an offence under GST.
He obtains refund of any CGST/SGST by fraud.
He takes and/or utilizes input tax credit without actual receipt of goods and/or services
He deliberately suppresses his sales to evade tax

Supply/transport of goods

He transports goods without proper documents
Supplies/transports goods which he knows will be confiscated
Destroys/tampers goods which have been seized

Others

He has not registered under GST although he is required to by law
He does not deduct TDS or deducts less amount where applicable.
He does not collect TCS or collects less amount where applicable.
Being an Input Service Distributor, he takes or distributes input tax credit in violation of the rules
He obstructs the proper officer during his duty (for example, he hinders the officer during the audit by tax authorities)
He does not maintain all the books that he required to maintain by law
He destroys any evidence

Offences under GST by Companies, LLPs, HUFs and others

For any offence committed by a company, both the officer in charge (such as director, manager, secretary) as well as the company will be held liable.

For LLPs, HUFs, trust, the partner/karta/managing trustee will be held liable.

Penalties under GST

For fraud

An offender has to pay a penalty amount of tax evaded/short deducted etc., i.e., 100% penalty, subject to a minimum of Rs. 10,000.

Not only the taxable person but any person who-

Helps any person to commit fraud under GST
Acquires/receives any goods/services with full knowledge that it is in violation of GST rules
Fails to appear before the tax authority on receiving a summons
Fails to issue an invoice according to GST rules
Fails to account/vouch any invoice appearing in the books

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