Goods and Services Tax

Can a company be proceeded against or prosecuted for any offence under the MGL
Question 22
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 22. Can a company be proceeded against or prosecuted for any offence under the MGL?
Ans. Yes. Section 77 of the MGL 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 itself, be liable to be pr

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What is a culpable state of mind
Question 21
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 21. 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;
* the pe

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What is the procedure for conducting search?
Question 11
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 11. What is the procedure for conducting search?
Ans. Section 60(8) of MGL prescribes that searches must be carried out in accordance with the provisions of Code of Criminal Procedure, 1973. Section 100 of the Code of Criminal Procedure describes the procedure for search.
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Statute, statutory provisions legislation, law,

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Is ‘mensrea’ or culpable mental state necessary for prosecution under MGL
Question 20
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 20. Is 'mensrea' or culpable mental state necessary for prosecution under MGL?
Ans. Yes. However, Section 75 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 of mind
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What powers can be exercised by an officer during valid search?
Question 10
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 10. What powers can be exercised by an officer during valid search?
Ans. An officer carrying out a search has the power to search for and seize goods (which are liable to confiscation) and documents, books or things (relevant for any proceedings under MGL) from the premises searched. During search, the offi

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Is prior sanction of competent authority mandatory for initiating prosecution
Question 19
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 19. 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, Regulat

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What are cognizable and non-cognizable offences under MGL
Question 18
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 18. What are cognizable and non-cognizable offences under MGL?
Ans. In terms of Section 73(3) and 73(4) of MGL
* all offences where the evasion of tax is less than ₹ 250 lakh shall be non-cognizable and bailable,
* all offences where the evasion of tax exceeds ₹ 250 lakh shall be cogn

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When does goods become liable to confiscation under the provisions of MGL?
Question 9
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 9. When does goods become liable to confiscation under the provisions of MGL?
Ans. As per section 70 of Model GST Law, goods become liable to confiscation when any person does the following:
(i) supplies any goods in contravention of any of the provisions of this Act or rules made thereunder lea

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What is the punishment prescribed on conviction of any offence under the MGL
Question 17
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 17. What is the punishment prescribed on conviction of any offence under the MGL?
Ans. The scheme of punishment provided in section 73(1) is as follows:
Offence involving
Punishment (Imprisonment extending to)
Tax evaded exceeding ₹ 250 lakh
5 years and fine
Tax evaded

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Which are the offences which warrant prosecution under the MGL
Question 16
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 16. Which are the offences which warrant prosecution under the MGL?
Ans. Section 73 of the MGL codifies the major offences under the Act which warrant institution of criminal proceedings and prosecution. 12 such major offences have been listed as follows:
1) Making a supply without issuing an invoice or upon issuance of a false/incorrect invoice;
2) Issuing an invoice without making supply;
3) Not paying tax collected for a period exceeding 3 months;
4) Not depositing any tax that has been collected in contravention of the Act for a

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What is a Search Warrant and what are its contents?
Question 8
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 8. What is a Search Warrant and what are its contents?
Ans. The written authority to conduct search is generally called search warrant. The competent authority to issue search warrant is an officer of the rank of Joint Commissioner or above. A search warrant must indicate the existence of a reasonable belief leading to

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What is Prosecution
Question 15
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 15. 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 provision

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Can any conveyance carrying goods without cover of prescribed documents be subject to confiscation
Question 14
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 14. Can any conveyance carrying goods without cover of prescribed documents be subject to confiscation?
Ans. Yes. Section 71 provides that any conveyance carrying goods without the cover of any documents or declaration prescribed under the Act shall be liable

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After confiscation, is it required to give option to the person to redeem the goods
Question 13
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 13. After confiscation, is it required to give option to the person to redeem the goods?
Ans. Yes. In terms of section 70(6), 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 g

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Is it mandatory that such ‘reasons to believe’ has to be recorded in writing by the proper officer, before issuing authorization for Inspection or Search and Seizure?
Question 7
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 7. Is it mandatory that such 'reasons to believe' has to be recorded in writing by the proper officer, before issuing authorization for Inspection or Search and Seizure?
Ans. Although the officer is not

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What happens to the goods upon confiscation of goods by the proper officer
Question 12
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 12. 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 possessio

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Under which circumstances can goods be confiscated under MGL
Question 11
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 11. Under which circumstances can goods be confiscated under MGL?
Ans. Under Section 70 of the MGL, goods shall be liable to confiscation if any person:
* supplies any goods in contravention of any provision of this Act and such contravention results in evasion of tax payable under the Act, or

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What is meant by ‘reasons to believe’?
Question 6
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 6. What is meant by 'reasons to believe'?
Ans. Reason to believe is to have knowledge of facts which, although not amounting to direct knowledge, would cause a reasonable person, knowing the same facts, to reasonably conclude the same thing. As per Section 26 of the IPC, 1860, “A person is said to have 'reason to believe' a thi

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What is meant by confiscation
Question 10
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 10. 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

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Who can order for Search and Seizure under the provisions of MGL?
Question 5
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 5. Who can order for Search and Seizure under the provisions of MGL?
Ans. An officer of the rank of Joint Commissioner or above can authorize an officer in writing to carry out search and seize goods, documents, books or things. Such authorization can be given only where the Joint Commissioner has reasons

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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 9
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 9. What is the penalty prescribed for a person who opts for composition scheme despite being ineligible for the said scheme?
Ans. Section 8(3) provides that if a person who has opted for composition of his tax liability is found as not bei

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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 8
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 8. 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 with

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Can the proper officer authorize Inspection of any assets/premises of any person under this Section?
Question 4
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 4. Can the proper officer authorize Inspection of any assets/premises of any person under this Section?
Ans. No. Authorization can be given to an officer of CGST/ SGST to carry out inspection of any of the following:
i. any place of business of a taxable person;
ii. a

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What is the penalty provided for any contravention for which no separate penalty has been prescribed under MGL
Question 7
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 7. What is the penalty provided for any contravention for which no separate penalty has been prescribed under MGL?
Ans. Section 67 of the MGL provides that any person who contravenes any provision of the Act or the rules made under this Act for whic

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Is any penalty prescribed for any person other than the taxable person
Question 6
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 6. Is any penalty prescribed for any person other than the taxable person?
Ans. Yes. Section 66(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 trans

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