What is IGST?
Question 1
Bill
Overview of the IGST Act
Faq On GST (2nd Edition) Dated 31.3.2017
21. Overview of the IGST Act
Q 1. What is IGST?
Ans. “Integrated Goods and Service
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What is the consequence of compounding of an offence under CGST/SGST Act?
Question 23
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 23. What is the consequence of compounding of an offence under CGST/SGST Act?
Ans. Sub-section (3) of section 138 provides that on payment of compounding amount no further proceeding to be initiated under this Act and criminal proceeding already initiated shall stand abated.
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Statute, stat
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Are there any monetary limits prescribed for compounding of offence?
Question 22
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 22. Are there any monetary limits prescribed for compounding of offence?
Ans. Yes. The lower limit for compounding amount is to be the greater of the following amounts: –
• 50% of tax involved, or
• ₹ 10,000.
The upper limit for compounding amount is to be greater of the followin
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Can offences under CGST/SGST Act be compounded?
Question 21
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 21. Can offences under CGST/SGST Act be compounded?
Ans. Yes. As per section 138 of the CGST/SGST Act, any offence, other than the following, may upon payment of the prescribed (compounding) amount be compounded and such compounding is permissible either before or after the institution of prosecution:
• Offences nu
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What is meant by compounding of offences?
Question 20
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 20. What is meant by compoundi
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Can a company be proceeded against or prosecuted for any offence under the CGST/SGST Act?
Question 19
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 19. Can a company be proceeded against or prosecuted for any offence under the CGST/SGST Act?
Ans. Yes. Section 137 of the CGST/SGST ACT provides that every person who was in-charge of or responsible to a company for the conduct of its business shall, along-with the company itsel
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What is a culpable state of mind?
Question 18
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 18. What is a culpable state of mind?
Ans. While committing an act, a “culpable mental state” is a state of mind wherein-
• the act is intentional;
• the act and its implications are understood and controllable;
• the person committing the act was not coerced and even overcomes hurdles to the act committed;
&bul
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Is ‘mensrea’ or culpable mental state necessary for prosecution under CGST/SGST Act?
Question 17
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 17. Is 'mensrea' or culpable mental state necessary for prosecution under CGST/SGST Act?
Ans. Yes. However, Section 135 presumes the existence of a state of mind (i.e. “culpable mental state” or mensrea) required to commit an offence if it cannot be committed without such a state
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Is prior sanction of competent authority mandatory for initiating prosecution?
Question 16
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 16. Is prior sanction of competent authority mandatory for initiating prosecution?
Ans. Yes. No person shall be prosecuted for any offence without the prior sanction of the designated authority.
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Statute, statutory provisions legislation, law, enactment, Acts, Rules, Regulations, Taxa
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What are cognizable and non-cognizable offences under CGST/SGST Act?
Question 15
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 15. What are cognizable and non-cognizable offences under CGST/SGST Act?
Ans. In terms of Section 132(4) and 132(5) of CGST/SGST Act
• all offences where the evasion of tax is less than ₹ 5 crores shall be non-cognizable and bailable,
• all offences where the evasion of tax exceed
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What is the punishment prescribed on conviction of any offence under the CGST/SGST Act?
Question 17
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 17. What is the punishment prescribed on conviction of any offence under the CGST/SGST Act?
Ans. The scheme of punishment provided in section 132(1) is as follows:
Offence involving
Punishment (Imprisonment extending to)
Tax evaded exceeding ₹ 5 crore or repeat offender250
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Which are the offences which warrant prosecution under the CGST/SGST Act?
Question 14
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 14. Which are the offences which warrant prosecution under the CGST/SGST Act?
Ans. Section 73 of the CGST/SGST Act codifies the major offences under the Act which warrant institution of criminal proceedings and prosecution. 12 such major offences have been listed as follows:
a) Making a supply without issuing an invoice or upon issuance of a false/incorrect invoice;
b) Issuing an invoice without making supply;
c) Not paying any amount collected as tax for a period exceeding 3 months;
d) Availing or utilizing credit of input tax witho
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What is Prosecution?
Question 13
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 13. What is Prosecution?
Ans. Prosecution is the institution or commencement of legal proceeding; the process of exhibiting formal charges against the offender. Section 198 of the Criminal Procedure Code defines “prosecution” as the institution and carrying on of the legal proceedings against a person.
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Statute, statutory provisions legisla
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Can any conveyance carrying goods without cover of prescribed documents be subject to confiscation?
Question 12
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 12. Can any conveyance carrying goods without cover of prescribed documents be subject to confiscation?
Ans. Yes. Section 130 provides that any conveyance carrying goods without the cover of any documents or declaration prescribed under the Act shall be liable to confis
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After confiscation, is it required to give option to the person to redeem the goods?
Question 11
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 11. After confiscation, is it required to give option to the person to redeem the goods?
Ans. Yes. In terms of section 130(2), the Owner or the person in-charge of the goods liable to confiscation is to be given the option for fine (not exceeding market price of confiscated goods) in
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What happens to the goods upon confiscation of goods by the proper officer?
Question 10
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 10. What happens to the goods upon confiscation of goods by the proper officer?
Ans. Upon confiscation, the title in the confiscated goods shall vest in the Government and every Police officer to whom the proper officer makes a request in this behalf, shall assist in taking possession of the g
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Under which circumstances can goods be confiscated under CGST/SGST Act?
Question 9
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 9. Under which circumstances can goods be confiscated under CGST/SGST Act?
Ans. Under Section 70 of the CGST Act, goods shall be liable to confiscation if any person:
• supplies or receives any goods in contravention of any provision of this Act and such contravention results in evasion of ta
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What is meant by confiscation?
Question 8
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 8. What is meant by confiscation?
Ans. The word 'confiscation' has not been defined in the Act. The concept is derived from Roman Law wherein it meant seizing or taking into the hands of emperor, and transferring to Imperial “fiscus” or Treasury. The word “confiscate” has been defined in Aiyar's Law Lexicon as to “appropriate (private pro
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What is the penalty prescribed for a person who opts for composition scheme despite being ineligible for the said scheme?
Question 7
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 7. What is the penalty prescribed for a person who opts for composition scheme despite being ineligible for the said scheme?
Ans. Section 10(5) provides that if a person who has paid under composition levy is found as not being eligible for compound
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What action can be taken for transportation of goods without valid documents or attempted to be removed without proper record in books?
Question 6.
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 6. What action can be taken for transportation of goods without valid documents or attempted to be removed without proper record in books?
Ans. If any person transports any goods or stores any such goods while in transit without the d
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What is the penalty provided for any contravention for which no separate penalty has been prescribed under CGST/SGST Act?
Question 6
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 6. What is the penalty provided for any contravention for which no separate penalty has been prescribed under CGST/SGST Act?
Ans. Section 125 of the CGST/SGST Act provides that any person who contravenes any provision of the Act or the rules made un
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Is any penalty prescribed for any person other than the taxable person?
Question 5
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 5. Is any penalty prescribed for any person other than the taxable person?
Ans. Yes. Section 122(3) provides for levy of penalty extending to ₹ 25,000/- for any person who-
• aids or abets any of the 21 offences,
• deals in any way (whether receiving, supplying, storing or transp
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What is the quantum of penalty provided for in the CGST /SGST Act?
Question 4
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 4. What is the quantum of penalty provided for in the CGST /SGST Act?
Ans. Section 122(1) provides that any taxable person who has committed any of the offences mentioned in section 122 shall be punished with a penalty that shall be higher of the following amounts:
• The amount of tax evaded, frau
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What are the general disciplines to be followed while imposing penalties?
Question 3
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 3. What are the general disciplines to be followed while imposing penalties?
Ans. The levy of penalty is subject to a certain disciplinary regime which is based on jurisprudence, principles of natural justice and principles governing international trade and agreements. Such general discipline is enshrined in section 126 of the Act. Accordingly-
• no penalty is to be imposed without issuance of a show cause notice and proper hearing in the matter, affording an opportunity to the person proceeded against to rebut the allegations levelled
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What is meant by the term penalty?
Question 2
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 2. What is meant by the term penalty?
Ans. The word “penalty” has not been defined in the CGST/SGST Act but judicial pronouncements and principles of jurisprudence have laid down the nature of a penalty as:
• a temporary punishment or a sum of money imposed by statute, to be paid as punishment for the commission of a certain off
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