Proposed prosecution amendments under GST vide Budget 2021

The Union Budget 2021 has come up with various amendments relating to prosecutions under GST. The present article tries to explain all the prosecution amendments proposed vide the Finance Bill 2021.

Important prosecution amendments proposed vide Budget 2021–

• Amendment to section 74- Clause (ii) to explanation 1

Thus, as per the proposed amendments even after completion of proceedings under section 73 and section 74, a liable person can be penalized under section 129 and section 130.

• Coverage of term ‘self-assessment tax’ explained [section 75(12)]-

It is proposed to insert an explanation to section 75(12) which clarifies the inclusion of the term ‘self-assessment tax’. As per the explanation, self-assessment tax will cover the tax payable as per details of outward supplies filed under section 37 (Form GSTR-1), however, not included in the return filed under section 39.

Accordingly, recovery of tax (under section 79) can be initiated against the tax liability reflected in Form GSTR-1.

• Expansion of scope of provisional attachment [section 83]-The newly substituted provisions of section 83(1) mean as under-

• • The proceedings are initiated under any of the following chapters-
    • Chapter XII – Assessment
    • Chapter XIV – Inspection, Search, Seizure and Arrest.
    • Chapter XV – Demand and recovery.
  • The Commissioner is of the view that it is necessary to provisionally attach the property to protect the interest of the Government.
  • Following property can be attached-
    • Any property (which includes the bank account) of the taxable person; or
    • Any property (which includes the bank account) of the person specified under section 122(1A) of the CGST Act, 2017.
• Pre-deposit in relation to order passed detaining/ seizing of goods-in-transit and/or conveyance-in-transit [section 107(6)]-

It is proposed to insert a proviso to section 107(6) which states that 25% of the penalty amount should be pre-deposited before filing an appeal against an order passed in Form GST MOV-09.

• Amendment in the amount of penalty payable to release the detained/ seized goods [section 129 (1)]-

As per substituted clause (a) and clause (b) to section 129(1), post detention/ seizure, the goods will be released on payment of the following amount of penalty-

• Time limit introduced for issuance of notice and passing of the order in case of detained/ seized goods [section 129(3)]-

The entire sub-section (3) to section 129 is proposed to be substituted vide Budget 2021. As per the newly substituted provisions, in case of detention/ seizure of goods-in-transit and conveyance-in-transit, the proper officer is-

• • Required to issue notice, for payment of a specified penalty, within a period of seven days from such detention/ seizure.
  • Required to pass an order, for payment of a specified penalty, within a period of seven days from the date of service of the relevant notice.
• Amendments relating to power to collect for information [section 151]-

Entire section 151 is proposed to be substituted. The new section 151 states as under-

• • The Commissioner or any officer (authorized by the Commissioner) can direct any person to provide information in connection to any matter covered under the CGST Act.
  • The person needs to submit such information within the specified time and in a specified form.
• Amendment in a bar of disclosure of the information [section 152]-

As per the proposal, now the Commissioner or any officer (authorized by the Commissioner) will have to mandatorily give an opportunity of being heard to the concerned person, prior to using the information obtained under section 150 (obligation to furnish information return) and under section 151 (power to collect statistics).