Table of Contents
Summary of Penalty on Defaults under the GST Law
The GST law specifies the types of violations that can be committed and the penalties that will be imposed in each case. This is critical information for all business owners, accountants, and tax professionals, as even a minor error can have serious consequences. Details are mentioned here under :
SERIAL NO. |
SECTION |
PARTICULARS |
TYPE OF DEFAULT |
SECTION OF DEFAULT |
AMOUNT OF PENALTY |
| 1. | RULE 18 OF THE CGST RULES,2017 |
DISPLAY OF REGISTRATION CERTIFICATE AND GSTIN ON THE BOARD, WHERE THE PERSON UNDERTAKES BUSINESS ACTIVITIES.
|
FAILURE TO DISPLAY THE REGISTRATION NUMBER AND GSTIN ON THE BOARD OF PRINCIPAL PLACE OF BUSINESS. | SECTION 125 OF THE CGST ACT, 2017. |
RS.25,000/- |
| 2 | RULE 5 (1) OF THE CGST RULES,2017 | THE PERSON OPTING FOR COMPOSITION LEVY TO MENTION THE WORDS “COMPOSITION TAXABLE PERSON, AND SHALL NOT COLLECT TAX ON SUPPLIES”, ON THE TOP OF THE BILL OF SUPPLY, PLACE OF BUSINESS AND ANY OFFICIAL COMMUNICATIONS. | FAILURE TO COMPLY WITH THE PROVISIONS APPLICABLE ON COMPOSITE TAXPAYERS. | RULE 125 OF THE CGST RULES, 2017. |
RS.25,000/- |
| 3 | SECTION 22 & SECTION 24 OF THE CGST ACT,2017 | LIABILITY TO GET REGISTERED UNDER GST WHERE THE AGGREGATE TURNOVER EXCEEDS RS.20 LACS AND RS.10 LACS AND IS THE SUPPLIER IS LIABLE TO TAKE COMPULSARY REGISTRATION. | FAILURE TO GET REGSITERED. | SECTION 122 OF THE CGST ACT,2017 |
RS.10,000/- |
| 4 | RULE 31(1) & (2) OF TH CGST RULES,2017 | THE SUPPLIER SHALL ISSUE THE INVOICE BEFORE THE DATE ON WHICH THE SAID INVOICE IS OUGHT TO BE ISSUED. ALSO, THEY SHALL NOT ISSUE INVOICE WITHOUT MAKING THE SUPPLY. | FAILURE TO ISSUE INVOICE WITHIN THE DUE DATE, OR ISSUED INVOICE WITHOUT MAKING SUPPPLY. | SECTION 122 OF THE CGST ACT, 2017. |
RS.10,000/- OR AMOUNT EQUAL TO THE TAX EVADED. |
| 5 | RULE 46 OF THE CGST RULES,2017 | EVERY INVOICE ISSUED BE SIGNED BY THE AUTHORIZED SIGNATORY. | INVOICE NOT AUTHORISED BY THE AUTHORIZED SIGNATORY. | SECTION 122 OF THE CGST ACT,2017 |
RS.10,000/- |
| 6 | SECTION 49 (8) OF THE CGST ACT,2017 | AMOUNT OF TAX COLLECTED, BE DEPOSITED WITH THE GOVERNMENT WITHIN THE PRESCRIBED PERIOD. | AMOUNT COLLECTED BUT NOT PAID TO GOVERNMENT EVEN AFTER THE PERIOD OF THREE MONTHS. | SECTION 122 OF THE CGST ACT,2017 | RS.10,000/- OR AMOUNT EQUAL TO THE TAX EVADED. |
| 7 | SECTION 70 OF THE CGST ACT,2017 | A SUMMON CAN BE ISSUED BY THE PROPER OFFICER FOR THE REPRESENTATION BY THE TAXPAYER FOR PROVIDING CERTAIN INFORMATION. | THE TAXPAYER DOESNOT APPEAR IN FRONT OF PROPER OFFICER, AFTER RECEIVING THE SUMMON. | SECTION 122 (3) OF THE CGST ACT,2017 |
RS.25,000/- |
| 8 |
SECTION 68(1) OF THE CGST ACT,2017 |
INSPECTION OF GOODS IN TRANSIT OF VALUE EXCEEDING RS.50,000/- |
SUPPLY OF GOODS IN TRANSIT WITHOUT PROPER DOCUMENTATION. | RULE 138 OF THE CGST RULES, 2017 |
RS.10,000/- |
| 9 | SECTION 150 OF THE CGST ACT, 2017. |
THE TAXPAYER IS REQUIRED TO FURNISH THE INFORMATION RETURN. |
FAILS TO FURNISH INFORMATION RETURN. |
SECTION 123 OF THE CGST ACT,2018 |
RS.10,000/- |
| 10 |
RULE 59(1) OF THE CGST RULES,2017 AND 61 (5) OF THE CGST RULES,2017 |
FURNISH OF MONTHLY RETURN FOR DETAILS OF OUTWARD SUPPLIES OF GOODS OR SERVICES AND THE OUTWARD AND INWARD SUPPLIES, DETAILS OF ITC AND THE DUTY LIABILITY. |
NON-FILING OF GSTR 1 BEFORE THE DUE DATE, |
LATE FEES RS.20 PER DAY FOR NIL RETURNS. AND RS.50 (RS.25 CGST + RS.25 SGST) PER DAY FOR OTHER RETURNS. |
|
| 11 |
SECTION 16 OF THE CGST ACT,2017 |
NO REGISTERED PERSON IS ENTITLED TO AVAIL ITC UNLESS THE PERSON IS IN RECEIPT OF DUTY PAYING DOCUMENTS. |
CLAIMING ITC ON THE BASIS OF FAKE DOCUMENT OR NON-RECEIPT OF GOODS OR SERVICES. |
RS.10,000/- OR 100% OF ITC AVAILED WHICH IS HIGHER + INTEREST @24% p.a. |
|
| 12 |
SECTION 35 OF THE CGST ACT,2017 AND RULE 56 OF THE CGST RULES,2017 |
PROPER MAINTENANCE OF ACCOUNTS AND RECORD IN THE PRINCIPAL PLACE OF BUSINESS AND BRANCHES AS WELL. |
FAILURE TO MAINTAIN MANDATORY RECORDS. |
SECTION 122 OF THE CGST ACT,2017 |
RS.25,000/- |
| 13 | SECTION 51 OF THE CGST ACT,2017 | SUPPLIER REQUIRED TO DEDUCT TDS AND DEPOSIT IT WITH GOVERNMENT. | FAILS TO DEDUCT TDS AND PAY TO THE GOVERNMENT. | SECTION 122 OF THE CGST ACT,2017 |
RS.10,000/- HOWEVER, THIS SECTION HAS BEEN POSTPONED TILL JUNE’18 |
| 14 | SECTION 52 OF THE CGST ACT,2017 | TCS REQUIRED TO BE COLLECTED BY THE E-COMMERCE OPERATORS AN THE SAME BE DEPOSITED WITH THE GOVERNMENT. | FAILS TO COLLECT TCS AND PAY TO THE GOVERNMENT. | SECTION 122 OF THE CGST ACT,2017 |
RS.10,000/- HOWEVER, THIS SECTION HAS BEEN POSTPONED TILL JUNE’18 |
| 15 | SECTION 125 OF THE CGST ACT,2017 |
GENERAL PENALTY PROVISION UNDER CGST ACT, 2017. |
WHERE THE DEFAULT IS NOT PROVIDED WITH ANY PENALTY. |
RS.25,000/- |
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GST SERVICES
PENALTY IN TERMS OF IMPRISONMENT
| DEFAULT OF TAX | IMPRISONMENT | FINE |
| RS 100 – 200 LAKHS | UPTO 1 YEAR | APPLICABLE |
| RS 200 – 500 LAKHS | UPTO 3 YEARS | APPLICABLE |
| ABOVE RS 500 LAKHS | UPTO 5 YEAR | APPLICABLE |
