Section 122 - Penalty for Certain Offences
Section 122 - Penalty for Certain Offences
Mar 21, 2024
15 Mins
Section 122 - Penalty for Certain Offences
In a significant development, the government has introduced penalties for various offences committed by taxable persons under the GST Act. These penalties aim to discourage unlawful activities and ensure compliance with tax regulations.
Under Section 122 of the Act, a taxable person may face penalties for the following offences:
1. Supplying goods or services without issuing an invoice or providing false information regarding such supply.
2. Issuing invoices or bills without actually supplying goods or services, thus violating the Act's provisions.
3. Collecting tax from customers but failing to remit it to the government within three months of the payment becoming due.
4. Collecting tax in violation of the Act but not paying it to the government within three months of the payment becoming due.
5. Failing to deduct tax as per the requirements outlined in section 51, or deducting an amount less than the required amount, or failing to pay the deducted tax to the government.
6. Failing to collect tax as required by section 52, or collecting an amount less than the required amount, or failing to pay the collected tax to the government.
7. Illegitimately claiming input tax credit without actually receiving goods or services as specified in the Act or the rules.
8. Fraudulently obtaining a tax refund under the Act.
9. Taking or distributing input tax credit in violation of section 20 or the rules.
10. Falsifying financial records, producing fake accounts or documents, or providing false information or returns to evade tax payment under the Act.
11. Failing to register under the Act despite being eligible.
12. Providing false information regarding registration details during the application process or afterwards.
13. Obstructing or preventing any officer from carrying out their duties under the Act.
14. Transporting taxable goods without the required documents specified in the Act.
15. Underreporting turnover in order to evade tax payment under the Act.
16. Failing to keep, maintain, or retain books of account and other relevant documents as required by the Act or the rules.
17. Failing to provide information or documents requested by an officer under the Act or providing false information or documents during any proceedings.
18. Supplying, transporting, or storing goods believed to be liable for confiscation under the Act.
19. Issuing invoices or documents using the registration number of another registered person.
20. Tampering with or destroying material evidence or documents.
21. Disposing of or tampering with goods that have been detained, seized, or attached under the Act.
For any of the above offences, a penalty of either ten thousand rupees or an amount equivalent to the tax evaded or not paid, the tax not deducted or short deducted, the tax not collected or short collected, the irregularly availed, passed on, or distributed input tax credit, or the fraudulently claimed refund, will be applicable. The higher amount will be imposed as the penalty.
Furthermore, any person who benefits from and instigates a transaction falling under clauses (i), (ii), (vii), or (ix) of sub-section (1) will be liable to a penalty equivalent to the tax evaded, input tax credit availed of, or passed on.
Additionally, registered persons supplying goods or services on which tax has not been paid, or has been short-paid, erroneously refunded, or wrongly availed or utilized for reasons other than fraud, will face a penalty of ten thousand rupees or ten percent of the tax due, whichever is higher. For cases involving fraud or willful misstatement or suppression of facts to evade tax, the penalty will be equal to ten thousand rupees or the tax due, whichever is higher.
Moreover, any person found aiding or abetting the offences under clauses (i) to (xxi) of sub-section (1), acquiring or dealing with goods believed to be liable for confiscation, being involved in services that contravene the Act's provisions, or failing to appear before a central tax officer when summoned for inquiry, may face penalties up to twenty-five thousand rupees.
This move by the government aims to enforce stricter compliance with tax regulations and curb illicit activities in the GST framework.
Section 122 - Penalty for Certain Offences
In a significant development, the government has introduced penalties for various offences committed by taxable persons under the GST Act. These penalties aim to discourage unlawful activities and ensure compliance with tax regulations.
Under Section 122 of the Act, a taxable person may face penalties for the following offences:
1. Supplying goods or services without issuing an invoice or providing false information regarding such supply.
2. Issuing invoices or bills without actually supplying goods or services, thus violating the Act's provisions.
3. Collecting tax from customers but failing to remit it to the government within three months of the payment becoming due.
4. Collecting tax in violation of the Act but not paying it to the government within three months of the payment becoming due.
5. Failing to deduct tax as per the requirements outlined in section 51, or deducting an amount less than the required amount, or failing to pay the deducted tax to the government.
6. Failing to collect tax as required by section 52, or collecting an amount less than the required amount, or failing to pay the collected tax to the government.
7. Illegitimately claiming input tax credit without actually receiving goods or services as specified in the Act or the rules.
8. Fraudulently obtaining a tax refund under the Act.
9. Taking or distributing input tax credit in violation of section 20 or the rules.
10. Falsifying financial records, producing fake accounts or documents, or providing false information or returns to evade tax payment under the Act.
11. Failing to register under the Act despite being eligible.
12. Providing false information regarding registration details during the application process or afterwards.
13. Obstructing or preventing any officer from carrying out their duties under the Act.
14. Transporting taxable goods without the required documents specified in the Act.
15. Underreporting turnover in order to evade tax payment under the Act.
16. Failing to keep, maintain, or retain books of account and other relevant documents as required by the Act or the rules.
17. Failing to provide information or documents requested by an officer under the Act or providing false information or documents during any proceedings.
18. Supplying, transporting, or storing goods believed to be liable for confiscation under the Act.
19. Issuing invoices or documents using the registration number of another registered person.
20. Tampering with or destroying material evidence or documents.
21. Disposing of or tampering with goods that have been detained, seized, or attached under the Act.
For any of the above offences, a penalty of either ten thousand rupees or an amount equivalent to the tax evaded or not paid, the tax not deducted or short deducted, the tax not collected or short collected, the irregularly availed, passed on, or distributed input tax credit, or the fraudulently claimed refund, will be applicable. The higher amount will be imposed as the penalty.
Furthermore, any person who benefits from and instigates a transaction falling under clauses (i), (ii), (vii), or (ix) of sub-section (1) will be liable to a penalty equivalent to the tax evaded, input tax credit availed of, or passed on.
Additionally, registered persons supplying goods or services on which tax has not been paid, or has been short-paid, erroneously refunded, or wrongly availed or utilized for reasons other than fraud, will face a penalty of ten thousand rupees or ten percent of the tax due, whichever is higher. For cases involving fraud or willful misstatement or suppression of facts to evade tax, the penalty will be equal to ten thousand rupees or the tax due, whichever is higher.
Moreover, any person found aiding or abetting the offences under clauses (i) to (xxi) of sub-section (1), acquiring or dealing with goods believed to be liable for confiscation, being involved in services that contravene the Act's provisions, or failing to appear before a central tax officer when summoned for inquiry, may face penalties up to twenty-five thousand rupees.
This move by the government aims to enforce stricter compliance with tax regulations and curb illicit activities in the GST framework.
Author
Pluto Team
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