Simplified GST Series –Offences & Penalties /Section 123-128/CGST ACT 2017/PART-2
Article explains Section 123 Penalty for failure to furnish information return, Section 124 Fine for failure to furnish statistics, Section 126 General disciplines related to penalty, Section 127 Power to impose penalty in certain cases and Section 128 Power to waive penalty or fee or both.
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Section 123- Penalty for failure to furnish information return
If a person who is required to furnish an information return under section 150 fails to do so within the period specified in the notice issued under sub-section (3) thereof, the proper officer may direct that such person shall be liable to pay a penalty of one hundred rupees for each day of the period during which the failure to furnish such return continues:
Provided that the penalty imposed under this section shall not exceed five thousand rupees.
Analysis- Section 150 requires certain class of person to maintain records and furnish
information return within the prescribed time.
If the person who is required to file an ‘information return’ as prescribed under section 150 has not filed the return within the stipulated period of 30 days or such further period, a penalty of ` 100/-per day shall be levied for each day for which the failure continues but not exceeding five thousand rupees.
Section 124- Fine for failure to furnish statistics
If any person required to furnish any information or return under section 151, —
(a) without reasonable cause fails to furnish such information or return as may be required under that section, or
(b) wilfully furnishes or causes to furnish any information or return which he knows to be false, he shall be punishable with a fine which may extend to ten thousand rupees and in case of a continuing offence to a further fine which may extend to one hundred rupees for each day after the first day during which the offence continues subject to a maximum limit of twenty-five thousand rupees.
Analysis- This section provides for penal consequences for failure to furnish information or return as required under section 151 regarding collection of statistics.
The section specifies penalty for failure to provide information or return in two circumstances –
(a) fails to furnish information or return without reasonable cause; and
(b) furnishing false information wilfully.
The penalty specified is of up to ` 10,000/- and where the offence is continuing a further fine of up to Rs 100/- per day subject to maximum of ` 25,000/- under the respective Act.
Section 125- Any person, who contravenes any of the provisions of this Act or any rules made thereunder for which no penalty is separately provided for in this Act, shall be liable to a penalty which may extend to twenty-five thousand rupees.
Analysis- Penalty upto ` 25,000/- is imposable where any person contravenes:
(a) any of the provisions of the Act; or
(b) rules made thereunder.
for which no penalty is separately prescribed under the Act.
This section lays down certain principles to guide on ‘how’ and ‘when’’ to impose or refrain from imposing penalty .
1. No penalty can be imposed where the tax involved is less than ` 5,000/- (minor breach) or in case of documentation errors apparent on the face of record which is easily rectifiable and made without fraudulent intent or gross negligence.
2. When penalty is still liable to be imposed, the next safety as laid down is to inquire into the degree and severity of the breach to proceed with imposition of penalty. In these cases, if the facts do not demand imposition of penalty, restraint is advised.
3. Person liable to penalty must be given an opportunity of being heard.
4. Voluntary disclosure by a person to an officer (not merely in his own books and records) about the circumstances of the breach prior to the discovery of the breach by the officer may be considered as a mitigating factor for quantifying of penalty.
5. Cases involving fixed sum or fixed percentage of penalty are excluded.
Section 127- Power to impose penalty in certain cases
Where the proper officer is of the view that a person is liable to a penalty and the same is not covered under any proceeding under sections 62, or section 63 or section 64 or section 73 or section 74 or section 129 or section 130, he may issue an order levying such penalty after giving a reasonable opportunity of being heard to such person.
Analysis– Penalty proceedings can be initiated under this section even if the same are not covered under the following sections:
Section 62: Assessment of non-filers of returns
Section 63: Assessment of unregistered persons
Section 64: Summary assessment in certain special cases
Section 73: Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any willful misstatement or suppression of facts.
Section 74: Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilfull misstatement or suppression of facts
Section 129: Detention, seizure and release of goods and conveyances in transit Section 130: Confiscation of goods or conveyances and levy of penalty
In other words, penalties can be imposed by proper officer after giving due opportunity even in cases where there are no proceedings open with regard to assessment, adjudication, detention or confiscation.
Section 128- Power to waive penalty or fee or both
The Government may, by notification, waive in part or full, any penalty referred to in section 122 or section 123 or section 125 or any late fee referred to in section 47 for such class of taxpayers and under such mitigating circumstances as may be specified therein on the recommendations of the Council.
Analysis- This section provides for waiver of penalty leviable under section 122 or section 123 or section 125 or late fee payable under section 47 to those classes of taxpayers or under such mitigating factors as notified by the Government.
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