Under the GST law in India, there are specific pecuniary limits for the issuance of show cause notices (SCNs) and the passing of orders by the tax authorities. Here are the limits for different categories of taxpayers:
1. For taxpayers with turnover up to Rs. 1.5 crore: The proper officer can issue an SCN and pass an order for an amount of tax, interest, or penalty up to Rs. 1 lakh.
2. For taxpayers with turnover between Rs. 1.5 crore and Rs. 5 crore: The proper officer can issue an SCN and pass an order for an amount of tax, interest, or penalty up to Rs. 5 lakhs.
3. For taxpayers with turnover above Rs. 5 crore: The proper officer can issue an SCN and pass an order for any amount of tax, interest, or penalty.
It is important to note that the pecuniary limits are applicable for each act of non-compliance. For example, if a taxpayer has not paid tax for 5 different periods, and the tax liability for each period is Rs. 80,000, the total tax liability would be Rs. 4 lakh, which is within the pecuniary limit for a taxpayer with turnover up to Rs. 1.5 crore. However, if the taxpayer has not paid tax for 6 different periods, the total tax liability would be Rs. 4.8 lakh, which is above the pecuniary limit for a taxpayer with turnover up to Rs. 1.5 crore. In such cases, the proper officer can still issue an SCN and pass an order, but it would need to be approved by the Commissioner.
1. The pecuniary limits are applicable for each act of non-compliance: The pecuniary limits mentioned above are applicable for each act of non-compliance. This means that if a taxpayer has committed multiple violations, the pecuniary limit would be applied to each individual violation.
2. Proper officer for the purpose of the pecuniary limit: The proper officer for the purpose of the pecuniary limit is defined in the GST Act. For example, in the case of a registered person, the proper officer would be the officer appointed under the GST Act or the Commissioner.
3. Order passed by the proper officer: If the order is passed by the proper officer, it would be deemed to be issued under the authority of the Commissioner. This means that the Commissioner can review the order and modify it if necessary.
4. Approval of the Commissioner: If the tax liability exceeds the pecuniary limit, the proper officer can still issue an SCN and pass an order, but it would need to be approved by the Commissioner. The Commissioner can also take suo-motu action in cases where the tax liability exceeds the pecuniary limit.
5. Limitation period for issuance of SCN: The limitation period for issuance of an SCN is 3 years from the due date of filing the annual return for the financial year to which the tax not paid or short paid relates.
Overall, the pecuniary limits for issuance of SCNs and passing of orders provide clarity on the authority of the proper officer to take action in cases of non-compliance, while also ensuring that taxpayers are not subjected to undue harassment or burden.
Under GST, the pecuniary limit for issuance of Show Cause Notices (SCNs) is specified in Section 75(1) of the Central Goods and Services Tax (CGST) Act, 2017. The Section states that a SCN can be issued by a GST officer to a registered person if the amount of tax evaded or the amount of input tax credit wrongly availed or utilized or the amount of refund wrongly taken exceeds Rs. 50,000.
However, the limit is Rs. 5,000 for the following cases:
1. where the tax has not been paid;
2. where the credit has been wrongly availed;
3. where the credit has been wrongly utilized.
The pecuniary limit for issuance of SCNs is calculated on a cumulative basis for each case of tax evasion or wrongful utilization or wrongful availment of input tax credit or refund. If the amount involved is less than the prescribed limit, then no SCN can be issued.
As per the Central Goods and Services Tax (CGST) Act, 2017, the limitation period for issuance of a Show Cause Notice (SCN) is specified in Section 73(1) and Section 74(1).
Under Section 73(1), the SCN for tax short paid, incorrect refund, or wrongly availed input tax credit should be issued within three years of the date of filing of annual return for the relevant financial year, or of the date of commission of the offence, whichever is later.
Under Section 74(1), the SCN for cases involving fraud, willful misstatement or suppression of facts to evade tax, or contravention of any provisions with intent to evade payment of tax should be issued within five years of the date of filing of annual return for the relevant financial year, or of the date of commission of the offence, whichever is later.
It is important to note that the period of limitation for issuance of SCN starts from the latest date of the two mentioned above, and any SCN issued beyond the specified time limit will be considered invalid.
Sure, here are some frequently asked questions about the pecuniary limit for issuance of show cause notices (SCNs) and passing of orders under GST:
A: The pecuniary limit for issuance of SCNs is Rs. 50 lakhs. This means that if the tax liability involved in a case is less than Rs. 50 lakhs, the proper officer can issue an SCN.
A: The pecuniary limit for passing of orders is Rs. 1 crore. This means that if the tax liability involved in a case is less than Rs. 1 crore, the proper officer can pass an order.
A: The proper officer for the purpose of the pecuniary limit is defined in the GST Act. For example, in the case of a registered person, the proper officer would be the officer appointed under the GST Act or the Commissioner.
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