ASSESSMENT, OFFENCES

& PENALTIES
UNDER GST

CA SAURABH PUNYANI
B.COM, L.L.B., FCA, DISA, CCA
M NO. 9423680948, E-MAIL : [email protected]
SELF ASSESSMENT
YAAR…..SAB KAAM MUJHE HI
KARNA PADTA HAI….!!!

Every registered taxable

person shall himself assess
the taxes payable and furnish
a return for each tax period.
 PROVISIONAL ASSESSMENT
• An assesse can request the officer for provisional assessment if
he is unable to determine value or rate.

VALUE RATE
Calculating the Classifying the
transaction value goods/services

Understanding whether Identifying whether

certain receipts should any notification is
be included or not applicable or not
 Provisional Assessment - Procedure
Application in Writing

To proper officer requesting for payment of tax on provisional basis with reasons

Provisional Order - Within 90 Days from receipt of application

Pass an order allowing payment of tax at specified rate & value, subject to execution of bond for
surety & security by taxable person

Final Order – Within 6 months from communication of provisional order

Pass a final order taking into account such information as may be required
Provisional Assessment - Extension of Time Limit
The extension of time limit can be done on sufficient cause & reasons to be
recorded in writing by
Joint Commissioner or
Additional Commissioner
by maximum up to further
6 months

Commissioner by
maximum up to further 4
years
Provisional Assessment – Interest on Differential Tax

Tax Determined in Tax already paid Differential Tax to be

Final Assessment provisionally paid with interest @
not exceeding 18%

Differential Tax to be
Tax Determined in Tax already paid claimed as refund with
Final Assessment provisionally interest @ not
exceeding 6%
 SCRUTINY OF RETURNS
The Proper officer may scrutinize the returns and inform the tax payer for
any discrepancy noticed and seek his explanation.
- Audit by departmental
audit team
Not Received / - Audit by Chartered
Received but Accountant or Cost
accountant
Not
- Inspection, Search or
Satisfactory Seizure
In case within 30 days - Proceedings for demand
explanation is and recovery of tax

No further
Satisfactory
action
 ASSESSMENT OF OF RETURN
If a registered person fails to file any of the returns, the proper officer may serve a notice
to file return within 15 days of service of the notice

Notice Notice not

complied complied

Filed return, paid

tax, interest & fine
Officer can pass ex-parte order with 5
years from due date of annual return

Proceedings closed Return is filed within 30 days of ex-parte Proceedings Closed

order along with tax, interest & fine

Return not filed within 30 days of ex- Initiation of recovery

parte order proceedings
 ASSESSMENT OF PERSONS
Where a taxable person, fails to obtain registration or whose registration has been
cancelled but was liable to pay tax, the proper officer may serve a show cause notice

Show Cause Notice issued

SCN complied SCN not complied

If officer not satisfied

If officer satisfied with Best Judgment Assessment
with cause produced
cause produced, then (Within 5 years of due date
then Best Judgment
proceeding closed of annual return)
Assessment
 SUMMARY ASSESSMENT - PREREQUISITES
Prior permission from Joint Commissioner or
additional commissioner to be obtained

Proper officer must have notice of tax liability

based on some evidence

Proper officer must have sufficient grounds

that any delay in assessment will adversely
affect revenue

Proper officer must carry out the assessment

ex-party i.e. without the notice of the taxable
person
 SUMMARY ASSESSMENT - WITHDRAWAL
Withdrawal only by Joint Commissioner or
additional commissioner in following
circumstances:

1. The taxable person submits himself to the

assessment process within 30 days of service
of summary assessment order On
withdrawal,
process of
2. Joint Commissioner or additional adjudication
will start
commissioner sue-moto considers the order again…!!!
erroneous
MOVING FORWARD TO……

OFFENCES & PENALTIES

 SEC 122 : PENALTY FOR CERTAIN OFFENCES

The Act lists 21 offences in sec 122. The offences enumerated in

section are as follows:
× Making supply without invoice or with false or incorrect invoice
× Issuing an invoice without making any supply
× Not paying tax collected for a period exceeding 3 months
× Not paying tax collected in contravention of CGST/SGST Act for a
period exceeding 3 months
× Non deduction or lower deduction of tax at source or not
depositing tax deducted at source
Contd…
× Availing / utilizing ITC without actual receipt of goods &/or services
× Non collection or lower collection of or non payment of tax
collectible at source
× Fraudulently obtaining any refund
× Furnishing false information or falsification of financial records or
furnishing of fake accounts / documents with intent to evade tax
× Failure to register despite being liable to pay tax
× Furnishing false information regarding registration particulars
either at time of applying for registration or subsequently
× Obstructing or preventing any official in discharge of his duty
× Transporting goods without prescribed documents
× Suppressing turnover leading to tax evasion
Contd…
× Failure to maintain accounts / documents in the manner specified
in the act or failure to retain accounts / documents for the period
specified in the act
× Failure to furnish information / documents required by an officer in
terms of the act / rules or furnishing false information / documents
during the course of any proceedings
× Supplying / transporting / storing any goods liable for confiscation
× Issuing invoice or document using GSTN of another person
× Tampering or destroying any material evidence
× Disposing of / tampering with goods detained / seized / attached
under the act
× Availing / distributing ITC by input tax distributor in contravention
of the act & rules
General Penalty u/s 122(1) shall be higher of

Amount of tax evaded / fraudulently obtained as refund / availed as

credit / not deducted or collected / short deducted or short collected
OR
Rs.10,000/-

Specific Penalty imposed on any person who has not paid tax or
makes short payment of tax on supplies u/s 122(2) shall be higher of

10% of tax not paid or short paid

OR
Rs.10,000/-
SEC 123 : PENALTY FOR FAILURE TO FURNISH INFORMATION RETURN

INFORMATION RETURN IS
Return to be filed by various government authorities within
prescribed time u/s 150

PENALTY IF NOT FILED WITHIN PRESCRIBED TIME

per day of continuing default subject to maximum

amount of
 SEC 124 : FINE FOR FAILURE TO FURNISH STATISTICS

PERSON LIABLE TO FURNISH STATISTICS

• Commissioner may by notification direct that
• Statistics may be collected relating to any matter dealt with or in connection with the act
• The same will be collected by him or person authorized by him from concerned person
• The person so concerned is liable to furnish information for statistics

Without reasonable cause

fails to furnish such
information PENALTY will be
Upto Rs.10,000/-; if
Person Liable to furnish
information default continues then
Rs.100/day subject to
Willfully furnishes or Rs.25,000/-
causes to furnish false
information
 SEC 125 : GENERAL PENALTY

For contravention of any provision / rules of this Act for which no

penalty is separately provided, then such contravention shall
attract penalty which may extend to rupees

25,000/-
 SEC 126 : GENERAL DECIPLINES RELATING TO PENALTY
(TO BE FOLLOWED BY OFFICERS)

The section provides for general disciplines to be followed by the officer imposing penalty
under the act. The disciplines to be followed are:
 No penalty should be imposed without issuance of SCN or proper opportunity of being
heard as against the natural rule of justice
 No penalty should be imposed without considering the totality of the facts
 The penalty imposed must be commensurate with degree of severity of offence
 Nature of breach is to be mentioned clearly in the order of penalty to be issued
 The provisions under which the penalty has been imposed should be mentioned
specifically
 No penalty should be imposed in case of minor breach
( Tax involved < Rs.5,000/- )
 No penalty for any procedural lapse or mistake easily rectifiable made without
fraudulent intent & which can be seen apparently on the face of the record
 SEC 129 : DETENTION, SEIZURE & RELEASE OF GOODS &
CONVEYANCES IN TRANSIT

 The section provides for provision relating to detention, seizure &

release goods & conveyance in transit & penalty payable thereon
 If a person
• transports any goods or stores any such goods
• while in transit
• without prescribed documents or
• supplies or stores any goods that have not been recorded in books of
accounts maintained by him,
• then such goods shall be liable for detention along with vehicle on
which they are being transported
 Penalty for release of such detained
goods & conveyance

Owner comes Owner does not

forward comes forward

If goods If goods If goods If goods

taxable exempted taxable exempted

Tax + 100% of 2% of value of

5% of value of
tax as penalty / goods or Tax + 50% of value of goods or
equivalent Rs.25,000/- goods as penalty / Rs.25,000/- w.e.l.
security w.e.l. equivalent security
SEC 130 : CONFISCATION OF GOODS OR CONVEYANCE & LEVY OF PENALTY
Notwithstanding anything contained in this act, if a person
 Supplies or receives any goods in contravention of any of the provisions of this Act or the
rules made thereunder with intent to evade payment of tax or
 Does not account for any goods on which he is liable to pay tax under this Act or
 Supplies any goods liable to tax under this Act without having applied for registration
 Contravenes any of the provisions of this Act or the rules made thereunder with intent to
evade payment of tax
 Uses any conveyance as a means of transport for carriage of goods in
contravention of the provisions of this Act or the rules made thereunder 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
Then, all such goods or conveyances shall be liable to confiscation and the person shall be
liable to penalty under section 122
 CONSEQUENCES OF CONFISCATION
 The title of confiscated goods shall vest in the government & every police
officer to whom proper officer makes a request, shall assist in taking
possession of the goods
 The owner or in charge of goods liable for confiscation is to be given option
for fine not exceeding an amount of market value of goods less the tax
chargeable thereon
 Any conveyance carrying goods without cover of any documents prescribed
under the act shall be liable for confiscation; However if owner of
conveyance proves that the goods were being transported without
documents without his knowledge or without the knowledge of his agent
then the conveyance shall not be liable for confiscation.
SEC 131 : CONFISCATION OR PENALTY NOT TO INTERFERE WITH OTHER
PUNISHMENTS

The Section clarifies that

 Confiscation made or penalty imposed under the provisions of the act
 Shall not prevent infliction of any other punishments
 Under any other proposed act or
 Any other law for the time being in force
 SEC 132 : PUNISHMENT FOR CERTAIN OFFENCES

Sec 132 of the act lists offences which warrant institution of criminal
proceedings & prosecution. The offences enumerated in section are
as follows:
× Making supply without invoice or with false or incorrect invoice
× Issuing an invoice without making any supply
× Not paying tax collected for a period exceeding 3 months
× Availing / utilizing ITC without actual receipt of goods &/or services
× Fraudulently obtaining any refund
× Obstructing or preventing any official in discharge of his duty
× Supplying / transporting / storing any goods liable for
confiscation
× Furnishing false information or falsification of financial records
or furnishing of fake accounts / documents with intent to
evade tax
× Receiving / dealing with supply of service in contravention of
the act
× Tampering or destroying any material evidence
× Failing to supply any information required under the act / rules
or supplying false information
× Attempting to commit or abetting the commission of any of
the above offences
 PUNISHMENTS UNDER SECTION 132

OFFENCE INVOLVING PUNISHMENT EXTENDING TO

Tax evaded exceeding Rs.5 Crore or repeat offenders 5 years and Non Bailable

Tax evaded between Rs.2 Crore to Rs.5 crore 3 years and Bailable

Tax evaded between Rs.1 Crore to Rs.2 crore 1 years and Bailable

× False Records 6 Months or or both

× Obstructing Officer
× Tamper Records
 SEC 133 : OFFENCE & PENALTY FOR OFFICERS & CERTAIN OTHER PERSONS

Upto 6 months

Compilation of
Where a person statistical data &
either officer / other information Willfully discloses
government Engaged in the information Or
servant or any otherwise than in
other person or execution of his Fine Upto 25,000/-
agent of above duties
persons Provision of service Or
of common portal
Both

For government servant – sanction from government for initiating proceedings

For non government servant - sanction from commissioner for initiating proceedings
 SEC 134 : COGNIZANCE OF OFFENCE

 The section restricts courts to take cognizance of any offence punishable

under the act
or rules except with previous permission of the commissioner
 No court inferior to that of first class magistrate shall try offences

SEC 135 : PRESUMPTION OF CULPABLE MENTAL STATE

 The section presumes the existence of a state of mind required to commit

an offence if it can not be committed without such state of mind
 SEC 136 : RELEVANCY OF STATEMENTS UNDER CERTAIN CIRCUMSTANCES

 The section provides for relevancy of statements made & signed by person on
appearance in response to any summons

 Such statement shall be relevant for proving truth of facts when

a) When the person who made the statement is dead or cannot be found or
b) Is incapable of giving evidence or
c) Is kept out of the way by the adverse party or
d) Whose presence cannot be obtained without an amount of delay or expense which is
not reasonable or
e) The person who made the statement is examined as a witness in the case before the
court and the court is of the opinion that, having regard to the circumstances of the
case, the statement should be admitted as evidence in the interest of justice.
 SEC 137 : OFFENCES BY COMPANIES

Offence Committed by Person to be held guilty Person not to be held

guilty

Company Every person who, at the If person proves that the

time the offence was offence was committed
committed was in charge without his knowledge or
of, and was responsible to, that he had exercised all
the company for the due diligence to prevent
conduct of business of the the commission of such
company, as well as the offence.
company, shall be deemed
to be guilty

Partnership Firm / LLP / The partner or karta or

HUF / Trust managing trustee shall be
deemed to be guilty of -----do-----
that offence
 SEC 138 : COMPOUNDING OF OFFENCES

 The section provides for compounding of specified offences under the

proposed act either before or after the institution of prosecution, by
the commissioner on payment of prescribed compounding amount
 Compounding is permitted only after payment of tax, interest &
penalty and compounding shall affect any proceedings already
instituted under any other law
 Lower limit for compounding is
50% of tax involved or Rs.10,000/- w.e.h.
 Upper limit for compounding is
150% of tax involved or Rs.30,000/- w.e.h.
On payment of compounding amount, no further proceedings to be
initiated under the act & criminal proceedings shall stand abated