Any tax system having its own statutory provisions and made it mandatory for compliance by the taxpayers. Accordingly, the Government has famed Tax Acts and Tax Rules for the smooth tax administration in the Country. If any taxpayers disobey the Tax Acts and Tax Rules, it leads to violation of statutory provisions and will be treated as non-compliances. If any non-compliance has committed by a taxpayer, he is liable to pay penalty.

The non-compliance attitude of the taxpayers will be greater loss of revenue to the Government. In order to streamline corrective action for non-compliance and safeguard Government’s revenue, there are certain stringent provisions have been incorporated under GST law and for any non-compliance taxpayers will be liable to pay penalty and interest on certain cases.

The author highlights the various statutory provisions and consequences of non-compliances under GST. The non-compliances vis-a- vis consequences are summarized as under:

 

Sr.No

 

Acts / Rules

 

Statutory Provisions

 

Non-Compliances

Consequences / Penalty.
1 Rule 18 of the CGST Rules,2017 Display of registration certificate and Goods and Services Tax Identification Number on the name board.

1. Every registered person shall display his certificate of registration in a prominent location at his principal place of business and at every additional place or places of business.

2. Every registered person shall display his Goods and Services Tax Identification Number on the name board exhibited at the entry of his principal place of business and at every additional place or places of business.

If a registered person fails to display his GSTIN on the name board and registration certificate in his place of business shall be liable to pay penalty under Section 125 of the CGST Act, 2017.  

Rs.25,000/-

2 Rule 5 (1) of the CGST Rules,2017 Conditions and restrictions for composition levy.

(f) he shall mention the words “ composition taxable person, not eligible to collect tax on supplies” at the top of the bill of supply issued by him; and

(g) he shall mention the words “ composition taxable person” on every notice or signboard displayed at a prominent place at his principal places of business and at every additional place or places of business.

If a composition dealers fails to Comply the said provisions shall be liable to pay penalty under Rule 125 of the CGST Rules, 2017.  

 

Rs.25,000/-

3 Section 22 & Section 24 of the CGST Act,2017 Every supplier shall be liable to be registered if his aggregate turnover exceeds Rs.20 lacs and Rs.10 lacs for supplier in Special category States. Compulsory registration of certain suppliers. If the supplier is liable to be registered but fails to obtain registration is liable to pay penalty under Section 122 of the CGST Act,2017  

 

Rs.10,000/-

4 Rule 31(1) & (2) of th CGST Rules,2017 A registered person supplying taxable goods shall, before or at time of,-

(a) removal of goods for supply to the recipient, where the supply involves movement of goods; or

(b) delivery of goods or making available thereof to the recipient, in any other case, issues a tax invoice with showing details of particulars.

A registered person supplying taxable services shall issue a tax invoice.

 

Where a taxable person supplies any goods or services or both without issue of any invoice or issues any invoice or bill without supply of goods or services or both in violation of provisions of Act or rule made thereunder is liable to pay penalty under Section 122 of the CGST Act, 2017.  

 

Rs.10,000/- or an amount equivalent to the tax evaded.

5 Rule 46 of the CGST Rules,2017 Every invoice is to be signed by an authorised signatory. Who is authorised for GSTN Portal for registration purpose. If invoices are signed by the employees of assessee who is not authorised signatory as per GSTN Portal is liable for penalty under section 122 of the CGST Act,2017  

 

Rs.10,000/-

6 Section 49 (8) of the CGST Act,2017 Every taxable person shall discharge his tax i.e. self-assessed tax and other dues related to return period. Any taxable person collects any amount of tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment become due is liable to penalty under Section 122 of the CGST Act,2017 Rs.10,000/- or an amount equivalent to the tax evaded.
7 Section 70 of the CGST Act,2017 (Power to summon persons to give evidence and produce documents). The proper officer shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry in the same manner as provided in the case of a Civil court ( Code of Civil Procedure,1908) If a taxable person 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 inquiry is liable to pay penalty under section 122 (3) of the CGST Act,2017  

Rs.25,000/-

8  

Section 68(1) of the CGST Act,2017

 

Inspection of goods in movement. The person in charge of a conveyance carrying any consignment of goods of value exceeding Rs.50,000/-

 

If a taxable person transports any taxable goods without the cover of documents as per Rule 138 of the CGST Rules, 2017

 

Rs.10,000/-

9 Section 150 of the CGST Act, 2017.

 

 

Obligation to furnish information return.

 

If a taxable person fails to furnish information on return is liable for penalty under Section 123 of the CGST Act,2018

 

Rs.10,000/-

10  

Rule 59(1) of the CGST Rules,2017 and 61 (5) of the CGST Rules,2017

 

Every registered person is required to furnish monthly the details of outward supplies of goods or services in FORM GSTR-1 by 10’th of the next month.

The details of monthly outward and inward supplies, details of ITC and the duty liability shall be furnished in FORM GSTR 3B by 20th of the next month.

 

Non-filing of GSTR 1 return before due date liable for late fees.

 

Late fees Rs.20 (Rs.10 CGST + Rs.10 SGST) Per day in case of Nil returns. In other case Rs.50 (Rs.25 CGST + Rs.25 SGST) Per day for delay of filing returns.

11  

Section 16 of the CGST Act,2017

 

No registered person shall be entitled to avail ITC unless he posses duty paying documents & he has received goods or services or both.

If registered person avail ITC on the basis of fake document or non-receipt of goods or services is liable to pay penalty / interest.  

Rs.10,000/- or 100% of ITC availed which is higher + 24% interest from the date of availment to date of reversal.

12  

Section 35 of the CGST Act,2017 and Rule 56 of the CGST Rules,2017

 

Every registered person shall keep and maintain accounts and record in his principal place of business and in additional places of business as specified in the Certificate of registration.

 

If registered person fails to maintain mandatory records is liable for penalty under Section 122 of the CGST Act,2017

 

Rs.25,000/-

13 Section 51 of the CGST Act,2017 (TDS) Tax at source is required to be deducted by the Government departments from the payment made or credited to the supplier in specified situations of supply of goods and services or both. Fails to deduct TDS and pay to the Government is liable to pay penalty under Section 122 of the CGST Act,2017  

Rs.10,000/-

This section is postponed till june’18

14 Section 52 of the CGST Act,2017 (TCS) TCS refers to the tax which is collected by the electronic commerce operator when a supplier supplies some goods or services through its portal and the payment for that supply is collected by the electronic commerce operator. Fails to collect TCS and pay to the Government is liable to pay penalty under Section 122 of the CGST Act,2017  

Rs.10,000/-

This section is postponed till june’18

15 Section 125 of the CGST Act,2017  

General Penalty provision under CGST Act, 2017.

Any person, who contravenes any of the provisions of the CGST Act, 2017 and CGST Rules, 2017 shall be liable to penalty.  

Rs.25,000/-

Conclusion: To sum up, the statutory provisions are laid down under GST law for compliances by the taxpayers and simultaneously the provision of penalty has been incorporated under GST for any non-compliance. The provision of penalty has been specified not only to control tax evasion but also ensure smooth tax administration in the Country. Therefore, the taxpayers have to ensure proper issuance of tax invoices for supplies of goods and services, timely filing of GST returns, timely payment of taxes, periodically reconciliation of accounting, rightly availment of input tax credit & its utilization, maintain & keep records at principal place of business and each additional places of business. It is hope that with due compliances of statutory provisions by the taxpayers, will ultimately reduce litigation between department and taxpayers in the GST regime.

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2 responses to “Non-Compliances Vis-À-Vis Consequences – Under GST”

  1. Hiral0201 says:

    what shall be further course of action for saving from non compliance in case of Authorized signatory. As to add authorized signatory we need letter of authority or Board resolution which can be obtained for current date than what about the invoices which are already prepared? Request you to kindly guide on the same.

  2. Sandeep says:

    i feel the interpretation is taken in a very strict manner “Every invoice is to be signed by an authorised signatory. Who is authorised for GSTN Portal for registration purpose.”

    person auhorised for GSTN portal is generally a senior person..

    it is not practical for him/her to sign all invoices issued.. alternatively, we cannot make all persons who actually sign invoices as authorised signatories on GSTIN Portal..

    Please help us know : the expectations of department and practical implemention of “Authorised signatory” to be in compliance with law.

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