In our previous blogs, we discussed about all the provisions pertaining to seizure and arrests under GST. It’s a given that arrest will be treated as a last resort, when there is a confirmation that a taxable person has engaged in wilful tax evasion or an equivalent criminal activity. Post arrest, there needs to be a neat framework of offences and penalties under GST, so that justice may be meted out smoothly and effectively.Under GST, there are 4 main sets of provisions which deal with the various decisions with regards to punishment – offences, penalties, prosecution and compounding. In this blog, we will understand about the various provisions pertaining to offence under GST.

Offence under GST

An offence is defined as a breach of a law or rule, i.e. an illegal act. Similarly an offence under GST is a breach of the provisions of the GST Act. There are 21 offences under GST, which we have classified under the following sections, for your easy reference:

Fake or Incorrect Invoices / Bills

A taxable person indulges in the following GST offences:

  • Supplies any goods / services without any invoice or issues a false invoice
  • Issues any invoice or bill without supply of goods and / or services in violation of the provisions of GST
  • Issues invoices using the identification number i.e. GSTIN of another bona-fide taxable person

Fraud

A taxable person indulges in the following offence under GST:

  • Submits false information while registering under GST
  • Submits fake financial records or documents or files fake returns to evade taxes
  • Does not provide information or provides false information during proceedings

Tax Evasion

A taxable person indulges in the following offences under GST:

  • Collects GST, but does not submit it to the government within 3 months
  • Collects GST by breaking the provisions, but fails to deposit it to the government within 3 months, which will still be treated as an offence under GST
  • Obtains refund of any CGST / SGST by fraud
  • Takes and / or utilizes ITC without actual receipt of goods and / or services
  • Deliberately suppresses his sales to evade taxes

Supply or Transport of Goods

A taxable person indulges in the following offences in GST:

  • Transports goods without proper documents
  • Supplies or transports goods, which he knows will be confiscated
  • Destroys or tampers goods which have been seized

Other offences under GST

A taxable person:

  • Has not registered under GST although he is required to register under the law
  • Does not deduct TDS or deducts less amount than what is applicable
  • Does not collect TCS or collects less amount than what is applicable
  • Takes or distributes input tax credit in violation of the rules, being an Input Service Distributor
  • Obstructs the proper officer during his duty, for instance, during audit
  • Does not maintain all the books that he is required to maintain under the law
  • Destroys any kind of evidence

For all the 21 offences in GST listed above, penalty will be a minimum of INR 10,000, with variations in place, depending of the nature of the offence under GST. However, to know more about specific penalties, please refer our blog on consequences of non-compliance under GST, which explains the provisions of penalty under GST in detail.

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