From 1 July 2017, the Goods and Services Tax (GST) is one of the biggest tax reforms aimed at streamlining the country’s taxation system. It is a destination-based tax, transaction wise tax, and to remove corruption and maintain transparency in the country’s economy. If the organization does business without registration under GST, it will be an offense under GST and a heavy penalty will apply. Since every transaction is recorded and tracked between source and destination, it is essential for taxpayers to maintain and declare the information with the utmost accuracy.

Offenses & Penalties


there are a total of 21 offenses according to the GST law. we have mentioned below depending on various groups:

fake invoice:

  • Supply of any goods/services without any invoice or issuing a fake invoice
  • The supplier issues invoices in violation of GST provisions without supplying goods and services.
  • The invoice issue is that he uses another person’s GSTIN instead of his own.

Fake information:

  • Presents incorrect information during registration.
  • Returns incorrect information when filing returns or files incorrect returns.
  • He gives incorrect information during the evaluation procedure.

Evasion of tax:

  • Within 3 months from the date of such deduction, the government fails to deposit GST.
  • If TDS is reduced in violation of the provisions of GST, he is still liable to pay it within three months from the date of deduction. If wrongly deducted TDS is not deposited within the stipulated time, it is a crime.
  • Fraudulently claim CGST or SGST refund.
  • Claims input tax credit without actual receipt of goods or services.
  • Understands its sale during the tax avoidance period.

Others:

  • Without proper documentation affects the movement of goods.
  •  Supplements that will be seized by law.
  •  Destroyed or tamper with seized cargo.
  • Even if he is liable to do so, does not register himself.
  •  Wherever applicable TDS is not deducted or deducted less than the prescribed amount.
  •   Wherever applicable TCS does not collect or deposit less than the stipulated amount.
  •   Does not distribute credit properly or is not an input service distributor against provisions of law.
  • Obstructs the officer in the performance of his duties.
  • He does not maintain proper books of accounts as mandated by law.
  • Intentionally destroys any evidence.

Penalties


If someone commits an offense, a penalty has to be paid under GST. The principles on which these punishments are based are also outlined by law.

  1. For late filing:

                        The late fee is Rs. 100 per day per Act. So it is 100 under CGST & 100 under SGST. The total will be Rs. 200/day*. The maximum is Rs. 5,000. There is no late fee on IGST in case of delayed filing. Along with the late fees, interest has to be paid at 18% per annum. 

2. For Not filing:

         If you do not file a GST return, the return cannot be filed later. Therefore, the late filing of GST returns will have the effect of heavy fines and fines.

3. For the 21 offenses, making fraud intentionally or unintentionally: 

                      The individual or company may have to pay a fine of 10% or up to Rs 10,000. Additional penalties can lead to several years in prison depending on the tax amount.

The jail sentence in high-value fraud cases in GST is as follows-

Tax amount involved (INR)100-200 lakhs200-500 lakhsAbove 500 lakhs
Jail termUpto 1 yearUpto 3 yearsUp to 5 year
FineIn all three cases

Appeals


   Any person who is dissatisfied with the decision taken by the authorities for them can appeal for the reversal of the order.

  • First appellate authority
  • Appellate Tribunal
  • high Court
  • Supreme court

To avoid the lengthy process of appeals and litigation, a taxpayer can request an advance verdict under GST. The taxpayer seeks clarification from GST officials on GST treatment before commencing the proposed activity. The tax authority applicant is called a written decision (advance rule) on the question.

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