There are several penal aspects related to GST that taxpayers need to be aware of to ensure compliance with the GST laws. Some of the key penal provisions under GST are as follows:
1. Late Fees: A taxpayer is required to file their GST returns within the due date prescribed under the GST laws. In case of late filing, a late fee is applicable, which can range from Rs. 50 to Rs. 200 per day of delay, subject to a maximum of 0.25% of the taxpayer's turnover in the relevant state or union territory.
2. Interest on Late Payment: If a taxpayer fails to pay the GST liability within the due date, interest is payable on the amount of tax unpaid. The rate of interest is 18% per annum, and it is calculated from the date on which the tax was due until the date of payment.
3. Penalty for Non-Filing of GST Returns: If a taxpayer fails to file their GST returns within the due date for a continuous period of two or more tax periods, a penalty can be imposed, which can be up to Rs. 10,000 or 0.25% of the taxpayer's turnover in the relevant state or union territory, whichever is higher.
4. Penalty for Fraudulent Activities: If a taxpayer is found to have committed any fraudulent activities, such as suppressing their turnover or claiming excessive input tax credit, a penalty can be imposed, which can be up to 100% of the tax liability or the amount of tax evaded.
5. Seizure and Confiscation of Goods: If a taxpayer is found to have committed any illegal activities, such as evading taxes or transporting goods without proper documents, the goods can be seized and confiscated, and a penalty can be imposed, which can be up to 100% of the tax liability.
6. Prosecution: In extreme cases, where a taxpayer has committed a serious offense, such as willful evasion of taxes or fraud, criminal proceedings can be initiated, which can result in imprisonment and/or a fine.
It is important for taxpayers to be aware of these penal provisions and ensure compliance with the GST laws to avoid any penalties and legal actions. In case of any doubts or queries related to the penal aspects of GST, taxpayers can seek the help of a GST practitioner or a tax consultant.
The penal provisions under GST are broadly divided into three categories:
a. Offences that attract penalty
b. Offences that attract prosecution
c. Confiscation and seizure of goods
Penalties for non-compliance with GST include:
a. Late fee: If a taxpayer fails to file their GST returns on time, they will be liable to pay a late fee of Rs. 50 per day (Rs. 20 for Nil returns) for each day of delay, subject to a maximum of 0.25% of the taxpayer's turnover in the relevant state/UT.
b. Interest: If a taxpayer fails to pay the GST due on time, they will be liable to pay interest at the rate of 18% per annum.
c. Penalty for specific offences: GST law provides for specific penalties for various offences such as issuing incorrect invoices, taking and utilising input tax credit without actual receipt of goods/services, suppressing turnover, etc.
d. Prosecution: In cases of wilful evasion, false statement, or fraud, the taxpayer can be prosecuted and imprisoned for up to five years.
Yes, a taxpayer can be arrested for non-compliance with GST, but only in cases of wilful tax evasion or fraud. The GST law provides for the arrest of a person for committing such offences, subject to certain conditions and procedures.
Confiscation and seizure of goods under GST can be done by the tax authorities if they have reason to believe that the goods are liable to confiscation under the GST law. The procedure for confiscation and seizure of goods involves the following steps:
a. The tax authorities issue a notice to the taxpayer asking them to explain why the goods should not be confiscated.
b. If the taxpayer fails to provide a satisfactory response within the specified time, the tax authorities can confiscate the goods.
c. Payment of Tax under GST Part I
Consumers etc can now file GST refund claim for cancelled contracts
Taxability of personal use of asset by employee under GSTDetermination of tax & adjudication of demand– Sec 73 CGST Act, 2017