CHAPTER XIX – OFFENCES AND PENALTIES
Section 122 – Penalty for Certain Offences
A taxable person is liable to a penalty in the following cases:
- Issuing incorrect/false invoices or issuing invoices without supply of goods/services
- Collecting tax but not paying to the government within 3 months
- Short deduction/collection or non-payment of tax under sections 51 & 52
- Using or distributing input tax credit illegally
- Fraudulently claiming refund
- Falsifying accounts/documents to evade tax
- Failure to register or furnishing false registration info
- Obstructing officers
- Transporting taxable goods without documents
- Suppressing turnover, failing to maintain accounts, or furnishing false info
- Misusing registration numbers or tampering with evidence/goods
Penalty: ₹10,000 or tax evaded/credit/penalty, whichever is higher.
Additional liability: Anyone who benefits from these transactions is liable for tax evaded/credit passed on.
Other provisions: Aiding/abetting offences or dealing with confiscable goods: penalty up to ₹25,000. Fraud vs. non-fraud penalties differ (10% of tax or full tax depending on intent).
Enforced w.e.f. 1st July 2017
Section 123 – Failure to Furnish Information Return
- Penalty: ₹100 per day for not submitting return under section 150
- Maximum: ₹5,000
Enforced w.e.f. 1st July 2017
Section 124 – Fine for Failure to Furnish Statistics
- Failure without reasonable cause or willfully supplying false info:
- Fine up to ₹10,000
- Continuing offence: ₹100 per day (max ₹25,000)
Enforced w.e.f. 1st July 2017
Section 125 – General Penalty
- Any contravention not specifically penalized: up to ₹25,000
Enforced w.e.f. 1st July 2017
Section 126 – General Discipline Related to Penalty
- Minor breaches (< ₹5,000 tax involved) should not attract penalty
- Penalty must be proportionate to severity
- Opportunity to be heard must be given
- Voluntary disclosure can mitigate penalty
- Exceptions: fixed sum or percentage penalties
Enforced w.e.f. 1st July 2017
Section 127 – Power to Impose Penalty
- Officer can levy penalty not covered under other sections after giving a reasonable opportunity
Enforced w.e.f. 1st July 2017
Section 128 – Power to Waive Penalty or Fee
- Government may waive penalties or late fees under certain circumstances for specific classes of taxpayers
Enforced w.e.f. 1st July 2017
Section 129 – Detention, Seizure & Release of Goods in Transit
- Goods transported/stored in violation of GST law can be detained or seized
- Release possible on payment of penalty & applicable tax or furnishing security
- Opportunity to be heard must be given
- Non-payment within 15 days → goods may be sold or disposed to recover penalty
Enforced w.e.f. 1st July 2017
Section 130 – Confiscation & Levy of Penalty
- Goods/conveyances used in tax evasion can be confiscated
- Owner may pay fine in lieu of confiscation (≤ market value less tax)
- Confiscated items vest with Government
- Police may assist proper officer in confiscation
Enforced w.e.f. 1st July 2017
Section 131 – Confiscation or Penalty Not to Interfere with Other Punishments
- Penalty/confiscation under GST does not prevent other punishments under GST or other laws
Enforced w.e.f. 1st July 2017
Section 132 – Punishment for Certain Offences
- Offences include:
- Supplying goods/services without invoice
- Issuing invoices without supply
- Fraudulent ITC claims
- Non-payment/evading tax
- Falsifying records, obstructing officers, dealing with confiscable goods, tampering evidence
Imprisonment & fine based on tax/ITC/refund amounts:
- ₹5 Cr → Up to 5 years + fine
- ₹2–5 Cr → Up to 3 years + fine
- ₹1–2 Cr → Up to 1 year + fine
- Other offences (records/obstruction/evidence) → Up to 6 months or fine or both
- Repeat offence: up to 5 years + fine
- Minimum 6 months imprisonment unless otherwise recorded
- Most offences are non-cognizable & bailable; some are cognizable & non-bailable
- Prosecution requires Commissioner’s sanction
Enforced w.e.f. 1st July 2017
Section 133 – Liability of Officers & Certain Persons
- Wilful disclosure of GST info/statistics by employees/portal agents:
- Up to 6 months imprisonment or ₹25,000 fine or both
- Government servant → requires government sanction
- Non-Government servant → requires Commissioner sanction
Enforced w.e.f. 1st July 2017
Section 134 – Cognizance of Offences
- Court cannot take cognizance without Commissioner’s sanction
- Only Magistrate of First Class or higher can try offences
Enforced w.e.f. 1st July 2017
Section 135 – Presumption of Culpable Mental State
- Court presumes guilty intent unless proven otherwise
- “Culpable mental state” includes intention, motive, knowledge, belief
- Standard of proof: beyond reasonable doubt
Enforced w.e.f. 1st July 2017
Section 136 – Relevancy of Statements
- Statements made under summons during inquiry are relevant evidence if:
- Person is dead, missing, unable to testify, or delayed
- Court considers it in the interest of justice
Enforced w.e.f. 1st July 2017
Section 137 – Offences by Companies
- Company & responsible officers are deemed guilty if offence is committed
- Applies to partnerships, LLP, HUF, trusts
- Defense: prove offence committed without knowledge or due diligence
Enforced w.e.f. 1st July 2017
Section 138 – Compounding of Offences
- Offences may be compounded by Commissioner on payment of compounding amount
- Exceptions: serious/repeated offences, offences > ₹1 Cr, offences under other laws
- Minimum compounding: ₹10,000 or 50% of tax involved
- Maximum compounding: ₹30,000 or 150% of tax involved
- Payment stops further proceedings
Enforced w.e.f. 1st July 2017