OFFENCES AND PENALTIES UNDER MODEL GOODS AND SERVICE TAX ACT, 2016 – Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 12-9-2016 Last Replied Date:- 13-9-2016 – Introduction Chapter XVI of Model Goods and Service Tax Act, 2016 ( Act for short) provides for penalties for contravention of the provisions of the Act and the rules made there under. The following Sections deal with penal provisions- Section 66 – Offences and penalties; Section 67 – General Penalty; Section 68 – General disciplines related to penalty; Section 69 – Detention of goods and conveyances and levy of penalty; Section 70 – Confiscation of goods and levy of penalty; Section 71 – Confiscation of conveyances; Section 72 – Confiscation or penalty not to interfere with other punishments. The minimum penalty to be imposed is ₹ 10,000/-. The welcome provisions contains in Section 68. Usually before imposing penalty the provisions of tax laws provide that reasonable opportunity should be given to the a
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pay the same to the credit of the appropriate Government beyond a period of three months from the date on which such payment becomes due; collects any tax in contravention of the provisions of this Act but fails to pay the same to the credit of the appropriate Government beyond a period of three months from the date on which such payment becomes due; fails to deduct the tax in terms of Section 37 (1), or deducts an amount which is less than the amount required to be deducted under the said subsection, or where he fails to pay to the credit of the appropriate Government under subsection (2) thereof, the amount deducted as tax; fails to collect tax in terms of Section 43C (1), or collects an amount which is less than the amount required to be collected under the said sub-section, or where he fails to pay to the credit of the appropriate Government under sub-section (4) thereof, the amount collected as tax; takes and/or utilizes input tax credit without actual receipt of goods and/or serv
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ce with the provisions of this Act or the rules made there under; fails to furnish information and/or documents called for by a CGST/SGST officer in accordance with the provisions of this or rules made there under or furnishes false information and/or documents during any proceedings under this ; supplies, transports or stores any goods which he has reason to believe are liable to confiscation under this Act; issues any invoice or document by using the identification number of another taxable person; tampers with, or destroys any material evidence; disposes off or tampers with any goods that have been detained, seized, or attached under this Act. Section 66(2) provides penalty for making short payments repeatedly. A taxable person shall be deemed to have made short payments repeatedly , if there were short payments in three returns during any six consecutive tax periods. According to Section 66(2) any registered taxable person who repeatedly makes short payment of tax shall be liable t
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n an enquiry; shall be liable to a penalty which may extend to ₹ 25,000/-. General Penalty Section 67 provides that any person, who contravenes any of the provisions of this Act or any rules made there under for which no penalty is separately provided for in this Act, shall be liable to a penalty which may extend to ₹ 25,000/-. Detention of goods and levy of penalty Section 69(1) provides that where any person- transports any goods or stores such goods while they are in transit in violation of the provisions of this Act; or stores or keeps in stock goods or supplies goods which have not been accounted for in the books or records maintained by him in the manner required by this Act; all such goods and the conveyance used as a means of transport for carrying the said goods shall be liable to detention, in the manner prescribed, by the proper officer. The same shall be released only after payment of applicable tax, interest and penalty leviable thereon or upon furnishing a sec
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es that where any goods are confiscated under this Act, the title of such goods shall thereupon vest in the appropriate Government. Section 70(6) provides that the proper officer adjudging confiscation shall take and hold possession of the things confiscated and every Officer of Police, on the requisition of such proper officer, shall assist him in taking and holding such possession. Confiscation of conveyances Section 71 provides that any conveyance used as a means of transport for carriage of taxable goods without the cover of documents as may be prescribed in this behalf shall be liable to confiscation, unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance. Redemption fine Section 70 (2) provides that whenever confiscation of any goods is authorized by this Act, the CGST/SGST officer adjudging it shall give to the owner of the goods or, where such owner is
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to the tax payable on the goods being transported thereon. Confiscation or penalty not to interfere with other punishments Section 72 provides that no confiscation made or penalty imposed under the provisions of this Act or the rules made there under shall prevent the infliction of any other punishment to which the person affected thereby is liable under the provisions of this Act or under any other law. General disciplines related to penalty Section 68 lays down instructions to the Officers to follow certain disciplines while imposing penalty as detailed below- No tax authority shall impose substantial penalties for minor breaches of tax regulations or procedural requirements. In particular, no penalty in respect of any omission or mistake in documentation which is easily rectifiable and obviously made without fraudulent intent or gross negligence shall be greater than necessary to serve merely as a warning.This section further explained that- a breach shall be considered a minor brea
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