COMPOUNDING OF OFFENCES UNDER \u2018CGST\u2019 ACT, 2017
By: – DR.MARIAPPAN GOVINDARAJAN
Goods and Services Tax – GST
Dated:- 6-7-2017<\/p>\n
Compoundable offence
\nCompoundable offences are those offences where, the complainant (one who has filed the case, i.e. the victim), enter into a compromise, and agrees to have the charges dropped against the accused. It consisted of a prosecutor or victim of an offence accepting anything of value under an agreement not to prosecute, or to hamper the prosecution of, a felony. To "compound", in this context, means to come to a settlement or agreement. . Under the common law, compounding a felony was punishable as a misdemeanor. It is a short cut method to avoid litigation. In case of compounding, the accused need not appear personally and can be discharged on payment of composition fee which cannot be more than the maximum fine leviable under the relevant provision. All tax laws, company laws are having the provisions for compounding <\/p>\n
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\n (a) supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made there under, with the intention to evade tax;
\n (b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made there under leading to wrongful availment or utilization of input tax credit or refund of tax;
\n (c) avails input tax credit using such invoice or bill referred to in clause (b);
\n (d) collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;
\n (e) evades tax, fraudulently avails input tax credit or fraudulently obtains refund and where such offence is not covered under clauses (a) to (d);
\n (f) falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information with an intention to evade payment of tax due under t<\/p>\n
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\n * any other class of persons or offences as may be prescribed.
\nAny compounding allowed shall not affect the proceedings, if any, instituted under any other law. Compounding shall be allowed only after making payment of tax, interest and penalty involved in such offences.
\nSection 139(2) provides that the amount for compounding of offences shall be such as may be prescribed, subject to the minimum amount not being less than ₹ 10,000\/- or 50% of the tax involved, whichever is higher and the maximum amount not being less than ₹ 30,000\/- or 150% of the tax whichever is higher.
\nSection 139(3) provides that on payment of such compounding amount no further proceedings shall be initiated under this Act against the accused person in respect of the same offence and any criminal proceedings, if already initiated in respect of the said offence, shall stand abated.\n<\/p>\n
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\n * The application shall not be allowed unless the tax, interest and penalty liable to be paid have been paid in the case for which the application has been made;
\n * The applicant shall pay the compounding amount as ordered by the Commissioner within a period of 30 days from the date of receipt of the order and furnish the proof of such payment to the Commissioner;
\n * If the applicant fails to pay the compounding amount within 30 days from the date of receipt of the order, the order shall be vitiated and be void;
\n * The immunity granted to the applicant may be withdrawn at any time by the Commissioner if he is satisfied that the such person had, in the course of the compounding proceedings, concealed any material particulars or had given false evidence;
\n * Then the applicant may be tried for the offence with respect to which immunity was grantedor for any other offence that appears to have been committed by him in conne<\/p>\n
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