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Offences And Penalties Under GST

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The main difference in the existing tax structure and the GST is that the new regime will put an end to multiple taxes levied on different products and services at different stages by including most of it.

The GST will remove tax barriers between states and create a single market avoiding complications that exist in the present tax regime.

Penalties Under GST

1. Mistakes For Startups And MSME’s To Avoid

  • Not Filing Return On Time
  • Making An Inter-State Purchase
  • Be Careful Of Freebies: Limit under the composition Scheme is Rs. 50 lakhs and anything above Rs.50 lakhs is taxed. For Eg: If you’re total supply of goods annually was Rs. 48 Lakhs and you provide extra Rs.4 lakh of goods to your family for free, then your total expenditure will be Rs. 52 Lakhs and will face problems like non- inclusion under the composition scheme, payment of taxes, and included under non-filing of returns and imposed under a penalty of Rs. 5000 per return.
  • Not Seeking Permission: Seeking permission for benefits from the composition Scheme must be done by availing it at the beginning of the year.
  • Casual Registration: Businesses taking help of local registrations for establishments, service tax, and shops will not be covered under GST and are liable for Composition Scheme.  People who are of the notion of taking the help from local registrations for shops, establishments and service tax in future will not be entitled for GST.

2. Fraudulent Behaviour

Any person committing an offence of tax evasion has to pay a penalty of 100%. Not only the taxable person but also any person helping another person to commit fraud, Acquires/receives any goods/services with full knowledge that it is in violation of GST rules, fails to appear before the tax authority after receiving summons, failure to issue an invoice according to GST rules, and failure to account any invoice appearing in the books. All of the above cases will have to pay a penalty extending upto Rs. 25,000.

Additional cases of fraudulent behavior carry extra penalties like:

Tax Amount Involved

Jail Term

100-200 Lakhs

Upto 1 year

200-500 Lakhs

Upto 2 years

Above 500 Lakhs

Upto 5 years

General Penalty: Any offense under GST will extend to Rs. 25000.

3. Other Cases- No Intention To Fraud/Tax Evasion

Currently a person who makes short payments is penalized repeatedly. The GST will penalize even- first-time offenders. This will result in 100% of the tax amount when the customer evades tax or where there is a case of deliberate fraud. For genuine errors, the penalty is 10% of tax.

4. List Of Offences That Will Prevent You From Availing GST

  • When a taxable person supplies any goods/services without any invoice or issues false invoice.
  • When he/she issues invoices using the identification number of another bonafide taxable person
  • When not registered under GST according to law
  • When he/she transports goods without proper documents
  • Destroys/tampers with goods which have been seized
  • Deliberately suppresses sales to evade tax
  • Those who obtain refund of any CGST/SGST by fraud
  • Secretly collecting GST but does not submit it to the government within 3 months
  • Opting for composition scheme though not eligible
  • Hinders the proper officer during his duty
  • Those who do not provide information/gives false information during proceedings

5. Search And Confiscate Under GST

A Joint Commission of SGST and CGST can call for a search operation on the basis of inspection or any other reason. Documents, books, or any other thing useful during proceedings or hidden somewhere are the goods that will be liable for confiscation.

How To Register For GST?

We at are delighted to provide legal online services enabling applicants for GST with Advisory, Implementation, and Compliance services that ensure a smooth registration for GST. We help you develop tax strategies, suggest changes, plan and review, business models, and suggest suitable changes in sections of the agreement in line with GST. You can register and get your GST Registration Certificate without having to leave your home or office. Start your GST experience by giving a missed call on +91 8867880075.

10 Aug, 17

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