Sec 122- Penalty for certain offences

You are here :Home>Bare Law>Sec 122- Penalty for certain offences
Sec 122- Penalty for certain offences 2017-04-14T02:59:32+00:00

GST India Forum – Goods and Services Tax (GST) in India Forums Bare Law Sec 122- Penalty for certain offences

Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • AdminAdmin
    Keymaster
    Post count: 130
    Topics: 129
    Replies: 1
    Been thanked: 1 time
    #1168 |

    (1) Where a taxable person who–
    (i) supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice with regard to any such supply;
    (ii) 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 thereunder;
    (iii) 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;
    (iv) collects any tax in contravention of the provisions of this Act but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;
    (v) fails to deduct the tax in accordance with the provisions of sub-section (1) of section 51, or deducts an amount which is less than the amount required to be deducted under the said sub-section, or where he fails to pay to the Government under sub-section (2) thereof, the amount deducted as tax;
    (vi) fails to collect tax in accordance with the provisions of sub-section (1) of section 52, 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 Government the amount collected as tax under sub-section (3) of section 52;
    (vii) takes or utilises input tax credit without actual receipt of goods or services or both either fully or partially, in contravention of the provisions of this Act or the rules made thereunder;
    (viii) fraudulently obtains refund of tax under this Act;
    (ix) takes or distributes input tax credit in contravention of section 20, or the rules made thereunder;
    (x) falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information or return with an intention to evade payment of tax due under this Act;

    xi) is liable to be registered under this Act but fails to obtain registration;
    (xii) furnishes any false information with regard to registration particulars, either at the time of applying for registration, or subsequently;
    (xiii) obstructs or prevents any officer in discharge of his duties under this Act;
    (xiv) transports any taxable goods without the cover of documents as may be specified in this behalf;
    (xv) suppresses his turnover leading to evasion of tax under this Act;
    (xvi) fails to keep, maintain or retain books of account and other documents in accordance with the provisions of this Act or the rules made thereunder;
    (xvii) fails to furnish information or documents called for by an officer in accordance with the provisions of this Act or the rules made thereunder or furnishes false information or documents during any proceedings under this Act;
    (xviii) supplies, transports or stores any goods which he has reasons to believe are liable to confiscation under this Act;
    (xix) issues any invoice or document by using the registration number of another registered person;
    (xx) tampers with, or destroys any material evidence or document;
    (xxi) disposes off or tampers with any goods that have been detained, seized, or attached under this Act,
    he shall be liable to pay a penalty of ten thousand rupees or an amount equivalent to the tax evaded or the tax not deducted under section 51 or short deducted or deducted but not paid to the Government or tax not collected under section 52 or short collected or collected but not paid to the Government or input tax credit availed of or passed on or distributed irregularly, or the refund claimed fraudulently, whichever is higher.
    (2) Any registered person who supplies any goods or services or both on which any tax has not been paid or short-paid or erroneously refunded, or where the input tax credit has been wrongly availed or utilised,-
    (a) for any reason, other than the reason of fraud or any wilful misstatement or suppression of facts to evade tax, shall be liable to a penalty of ten thousand rupees or ten per cent. of the tax due from such person, whichever is higher;
    (b) for reason of fraud or any wilful misstatement or suppression of facts to evade tax, shall be liable to a penalty equal to ten thousand rupees or the tax due from such person, whichever is higher.
    (3) Any person who–
    (a) aids or abets any of the offences specified in clauses (i) to (xxi) of sub-section (1);
    (b) acquires possession of, or in any way concerns himself in transporting, removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner deals with any goods which he knows or has reasons to believe are liable to confiscation under this Act or the rules made thereunder;
    (c) receives or is in any way concerned with the supply of, or in any other manner deals with any supply of services which he knows or has reasons to believe are in contravention of any provisions of this Act or the rules made thereunder;
    (d) fails to appear before the officer of central tax, when issued with a summon for appearance to give evidence or produce a document in an inquiry;

    (e) fails to issue invoice in accordance with the provisions of this Act or the rules made thereunder or fails to account for an invoice in his books of account,
    shall be liable to a penalty which may extend to twenty-five thousand rupees.

    Priya MadrechaPriya Madrecha
    Moderator
    Post count: 280
    Topics: 4
    Replies: 276
    Been thanked: 1 time

    122.1    Introduction
    For effective implementation of any tax-law and to do justice to tax abiding society, provisions to take strict action against offenders are required. The discussion in the following paragraphs deal with the punitive provisions of GST law.
    122.2    Analysis
    At the outset, the section declares the offences that attract penalty as a consequence, apart from the requirement to pay the tax and applicable interest. Some of the offences listed under this section may also attract prosecution under section 132 but that depend on the gravity of the offence defined in that section.
    The Section is divided in three main parts:
    (i)    The first sub-section prescribes 21 types of offences, any one of which if committed, can attract penalty of ten thousand rupees or equal to amount of tax involved, whichever is higher.
    (ii)    The second sub-section deals with two situations, first is where certain offences committed are not due to either fraud or wilful misstatement or suppression of facts. In such a case, penalty will get reduced to 10% of tax involved subject to a minimum of ten thousand rupees. And then, where the offence committed is due to either fraud or any wilful misstatement or suppression of facts to evade tax will result in a penalty equal to tax involved subject to a minimum of ten thousand rupees.
    (iii)    The third sub-section deals with offences where the person is not directly involved in any evasion but may be a party to evasion or if he does not attend summons or produce documents. Penalty in such a case would be upto twenty five thousand rupees.
    While this section describes the offence and prescribes the penalty applicable, the procedure for adjudicating the imposition of this penalty is under section 73 and section 74 in which there is no express reference to this section. Persons found to have committed the offences listed in this section are liable to payment of penalty as follows:
    A.  Penalty equivalent to higher of Rupees 10,000/- or tax evaded/ tax not deducted/ collected or short deducted/collected or tax deducted/collected but not paid whichever is higher in the following cases:
    1.    Supplies any goods/services:
    (a)    Without issue of any invoice or
    (b)    Issues an incorrect/false invoice in respect of such supply
    2.    Issues an invoice without supply of goods/services in violation of the provisions of the Act/ Rules
    3.    Collects any amount as tax but fails to deposit the same with the Government beyond a period of three months from due date
    4.    Collects any tax in contravention of law but fails to deposit the same with the Government beyond a period of three months from due date
    5.    Fails to
    (a)    Deduct tax/deduct appropriate tax, as per Section 51 (Section 51 is applicable to certain specific persons. The said section requires such specified persons to deduct tax at the rate of one per cent out of the payment to the supplier if the value of supply under a contract exceeds two lakh and fifty thousand rupees) or
    (b)    deposit the tax deducted with the Government
    6.    Fails to
    (a)    collect tax/collect appropriate tax as per provisions of Section 52 (Section 52 is applicable to electronic commerce operator to collect tax from the supplier of goods at the time of payment to such supplier at the rate of one per cent )
    (b)    deposit the tax collected with the appropriate Government
    7.    takes or utilizes input tax credit without actual receipt of goods/services either fully or partially in contravention of provisions of Act/ Rules
    8.    fraudulently obtains refund of tax
    9.    takes or distributes input tax credit in contravention of section 20 , or the rules made thereunder (Section 20 prescribes manner of distribution of credit by input service distributor)
    10.    With an intention to evade payment of tax
    (a)    falsifies or substitutes financial records, or
    (b)    produces fake accounts or documents, or
    (c)    furnishes any false information or return
    11.    fails to obtain registration
    12.    furnishes any false information with regard to registration particulars, either at the time of applying for registration, or subsequently
    13.    obstructs or prevents any officer in discharge of his duties
    14.    transports any taxable goods without the cover of specified documents
    15.    suppresses his turnover leading to evasion of tax
    16.    fails to keep, maintain or retain books of account and other documents as specified in law
    17.    fails to furnish information or documents called for by an officer or furnishes false information or documents during any proceedings
    18.    supplies, transports or stores any goods which he has reason to believe are liable to confiscation
    19.    issues any invoice or document by using the registration number of another taxable person
    20.    tampers with, or destroys any material evidence or document
    21.    disposes off or tampers with any goods that have been detained, seized, or attached under this Act.
    B.    Penalty at a reduced rate of 10% of the tax involved subject to minimum of Rs.10,000 will be levied in cases where any registered taxable person who supplies any goods or services by whom any tax has not been paid or short-paid or erroneously refunded, or where the input tax credit has been wrongly availed or utilized for any reason, other than the reason of fraud or any wilful misstatement or suppression of facts to evade tax. Penalty of 100% of the tax involved subject to minimum of Rs. 10,000 where fraud or any wilful misstatement or suppression of facts to evade tax.
    C.    Penalty up to rupees twenty-five thousand where any person:
    1.    aids or abets any of the offences specified in clause A above;
    2.    acquires possession of, or in any way concerns himself in transporting, removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner deals with any goods which he knows or has reason to believe are liable to confiscation;
    3.    receives or is in any way concerned with the supply of, or in any other manner deals with any supply of services which he knows or has reason to believe are in contravention of any provisions of this Act or the rules made thereunder;
    4.    fails to appear before the officer of central tax, when issued with a summon for appearance to give evidence or produce a document in an enquiry
    5.    fails to issue invoice in accordance with the provisions of this Act or rules made thereunder, or fails to account for an invoice in his books of account
    122.3    Comparative review
    Penalty provisions are more or less in line with the following provisions of subsumed Central laws in addition to the provisions of VAT laws of various States:
    Section/Rule     Act/Rule     Provision
    Section 9     Central Excise Act, 1944     Offences and penalties.
    Chapter XVI     Customs Act, 1962     Offences & Prosecutions
    Rules 8(3A)     Central     Excise     Rules, 2002     Failure to pay duty declared in return
    Rules 25 &
    2*6     Central     Excise     Rules, 2002     — Confiscation & Penalty
    — Penalty for Certain Offences
    Section 76     Finance Act, 1994     Penalty for failure to pay Service tax
    Section 77     Finance Act, 1994     General penalty for residual offences
    Section 78     Finance Act, 1994     Penalty for failure to pay service tax for reasons of fraud
    Section 89     Finance Act, 1994     Offences and Penalties
    Rules 15     Cenvat Credit Rules, 2004     Penalty for defaults in relation to CENVAT credit
    Rules 15A     Cenvat Credit Rules, 2004     General penalty
    122.4    Related provisions
    Section or Rule     Description
    Section 2(107)     Definition of taxable person
    Section 31     Tax Invoice
    Section 142     Supplementary Invoice
    Section 51      Tax to be deducted at source (TDS)
    Section 52      Tax to be collected at source by the electronic commerce operator
    Sections 16 to 21, 41 and 42     Input tax credit
    Section 22 to 30      Registration
    Section 54 to 58     Refund
    122.5    FAQs
    Q1.   Whether penalty becomes automatically leviable without any adjudication?
    Ans. Though not specifically mentioned in section 122 relating to penalties, in the light of section 126 dealing with general disciplines related to penalty and in view of principles of natural justice, penalties cannot be imposed without affording him an adequate opportunity of being heard.
    Q2.    Can there be any liability even if a person is not a taxable person?
    Ans. Yes, penalty under sub-section (3) can be levied on any person even if he is not a taxable person
    122.6    MCQs
    Q1.     If a person has failed to obtain the registration the penalty is equivalent to:
    (a)    amount of tax
    (b)    10% of tax
    (c)    upto ` 10,000
    (d)    the amount of tax or ` 10,000 whichever is higher
    Ans. (d) the amount of tax or ` 10,000 whichever is higher
    Q2. If a person fails to appear before GST officer, the maximum penalty that can be levied is:
    (a)    amount of tax
    (b)    10% of tax
    (c)    upto ` 10,000
    (d)    none of the above
    Ans. (d) none of the above
    Q3.     Penalty of 10% of the tax can be levied if:
    (a)    a person repeatedly had not appeared before GST officer for 3 times
    (b)    the taxable person has not filed returns for 6 consecutive months or more
    (c)    a taxable person has been served with show cause notice for 3 times repeatedly
    (d)    registered taxable person has not paid under bona fide belief Ans.  (d) registered taxable person has not paid under bona fide belief.
    Q4.     There is no penalty for not carrying specified documents during transportation of goods
    (i.)      true
    (ii) false Ans. (ii) false

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.