GST Compliance Check (Part -1) – Summary of 21 Offences under GST to safeguard yourself
Goods and Services tax has listed out certain activities as Offences. The primary aim of GST is to eliminate Tax Evasion. In this direction, strict penalties are fixed for the offences listed in the GST. Therefore it is advisable to ensure compliance with law and give adequate care to the below listed offences. There are 21 offences listed under the GST law as given below, followed by the penalties for committing these offences.
Fake/Incorrect invoices
1. A taxable person supplies any goods/services without any invoice or issues a false invoice.
2. Issues any invoice or bill without supply of goods/services in violation of the provisions of the GST law.
3. Issue invoices using the registration number of another taxable person.
Tax evasion
4. Collects any GST but does not submit it to the government within 3 months.
5. Collects any GST in contravention of provisions, the same still needs to be deposited to the government within 3 months. Failure to do so will be an offence under GST.
6. Suppresses his turnover leading to evasion of tax.
7. Obtains refund of any taxes paid under the GST law by fraud.
8. Avails or utilizes input tax credit without actual receipt of goods and/or services.
Fraud
9. Submits false information while registering under GST.
10. Submits fake financial records/documents or files fake returns to evade tax.
11. Does not provide information/gives false information during the proceedings under the GST law.
Supply/transport of goods
12. Transports any taxable goods without the cover of documents as may be specified in this behalf.
13. Supplies, transports or stores any goods which he has reasons to believe are liable to confiscation under this Act.
14. Tampers with, or destroys any material evidence or document.
Registration
15. Fails to get registered under this Act, though liable to be registered.
16. Furnishes any false information with regard to registration particulars either at the time of applying for registration, or subsequently.
Others
17. Fails to deduct TDS or deducts less amount where applicable.
18. Fails to collect TCS or collects less amount where applicable.
19. Obstructs the proper officer during his duty (for example, he hinders the officer during the audit by tax authorities)
20. Fails to keep, maintain or retain books of account and other documents in accordance with the provisions of this Act or the rules made there under.
21. Being an Input Service Distributor, he takes or distributes input tax credit in violation of the rules.
Penalties for the offences:
Case 1: For the 21 offences with no intention of fraud or tax evasion
Where certain offences committed are “not due to” either fraud or willful misstatement or suppression of facts. In such a case, penalty will get reduced to 10% of tax involved subject to a minimum of Rs. 10,000/-.
Case 2: For the 21 offences with the intention of fraud or tax evasion
Where the offence committed is “due to” either fraud or any willful misstatement or suppression of facts to evade tax will result in a penalty equal to tax involvedsubject to a minimum of Rs. 10,000/-.
Case 3: For person is not directly involved in any evasion but may be a party to evasion or if he does not attend summons or produce documents:
Penalty in such a case would be up to Rs. 25,000/- where any person:
- Aids or abets any of the offences specified in case 1 above;
- Acquires possession of, or in any way concerns himself in transporting, removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner deals with any goods which he knows or has reason to believe are liable to confiscation;
- Receives or is in any way concerned with the supply of, or in any other manner deals with any supply of services which he knows or has reason to believe are in contravention of any provisions of this Act or the rules made there under;
- Fails to appear before the officer of central tax, when issued with a summon for appearance to give evidence or produce a document in an enquiry;
- Fails to issue invoice in accordance with the provisions of this Act or rules made thereunder, or fails to account for an invoice in his books of account.
Author: CA Arpan Bohra is the Author of this article and is a qualified Chartered Accountant and Company Secretary. The Author can be reached at arpanbohra@hiregange.com.
Disclaimer: The entire contents of this article is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. It doesn’t constitute professional advice or a formal recommendation. The author has undertaken utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information’s provided hereinabove.
