Prosecution and Compounding of Offences under Revised Model GST Law: Everything You Need to Know

Goods and Services Tax (GST) has been implemented in India with the objective of streamlining the indirect taxation system and make it more transparent, efficient, and simple. However, the implementation of GST has brought in a host of new compliances and regulations that businesses must adhere to. Failure to comply with these regulations can lead to penalties and prosecution under the Revised Model GST Law. In this article, we will discuss the prosecution and compounding of offences under the Revised Model GST Law and provide you with everything you need to know.

Prosecution under Revised Model GST Law

Section 132 of the Revised Model GST Law deals with the prosecution of offences committed under GST. This section defines various offences that are punishable under GST, including:

Supply of goods or services without issue of an invoice
Issue of an invoice without supply of goods or services
Availing input tax credit using fraudulent means
Furnishing false information while registering under GST
Obstructing or preventing any officer in the discharge of his duties
Transporting goods without proper documents
Suppressing sales to evade tax

Any person who commits any of the above offences can be prosecuted under GST. If found guilty, the person can be punished with imprisonment for a term up to 5 years and a fine.

Compounding of Offences under Revised Model GST Law

The term compounding refers to the process of settling a dispute by payment of a sum of money. The Revised Model GST Law provides for compounding of certain offences committed under GST. Compounding is an option available to the person who has committed the offence to pay a certain amount of money in lieu of prosecution.

Under Section 138 of the Revised Model GST Law, certain offences are eligible for compounding. These include:

Supply of goods or services without issue of an invoice
Issue of an invoice without supply of goods or services
Furnishing false information while registering under GST
Failure to furnish information or documents required under GST

If a person commits any of the above offences, they may apply to the Commissioner for compounding of the offence. The Commissioner may then allow the person to compound the offence by paying the amount specified in the compounding order. The amount specified for compounding is generally a percentage of the tax involved in the offence. The person must pay the specified amount within a period of 30 days from the date of the compounding order.

It is important to note that if a person has been allowed to compound an offence under GST, they cannot be prosecuted for the same offence at a later stage. Also, a person can only compound an offence once. If they commit the same offence again, they will not be eligible for compounding.

Conclusion

The Revised Model GST Law has strict provisions for prosecution of offences committed under GST. It is important for businesses to comply with the regulations and avoid any non-compliance that may lead to prosecution. Compounding of offences is an option available to the person who has committed the offence to avoid prosecution. However, it is advisable to consult a legal expert before deciding to compound an offence under GST.