The government has in order to prosecute the fraudsters under the CGST Act inserted section 132 which provides for the types of offences along with amount of fraud which shall be considered for launching prosecution against them the detailed provisions are mentioned below:
Whoever commits any of the following offences, namely:
a) supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax.
b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilization of input tax credit or refund of tax.
c) avails input tax credit using such invoice or bill referred to in clause (b)
d) collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due
e) evades tax, fraudulently avails input tax credit or fraudulently obtains refund and where such offence is not covered under clauses (a) to (d)
f) falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information with an intention to evade payment of tax due under this Act
g) obstructs or prevents any officer in the discharge of his duties under this Act;
h) 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 reasons to believe are liable to confiscation under this Act or the rules made thereunder;
i) 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 reasons to believe are in contravention of any provisions of this Act or the rules made thereunder;
j) tampers with or destroys any material evidence or documents;
k) fails to supply any information which he is required to supply under this Act or the rules made thereunder or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information; or
l) attempts to commit, or abets the commission of any of the offences mentioned in clauses (a) to (k) of this section,
The aforementioned clauses are very large in scope and covers each and every person i.e. the supplier, receiver, transporter and warehouse keeper.
If a person commits any of the above offences he shall be punishable:
i) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken > RS 5 Crore, with imprisonment for a term which may extend to five years and with fine;
ii) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken > RS 2 Crore but </= Rs 5 Crore, with imprisonment for a term which may extend to three years and with fine;
iii) in the case of any other offence where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken > RS 1 crore but </= Rs 2 Crore , with imprisonment for a term which may extend to one year and with fine;
iv) in cases where he commits or abets the commission of an offence specified in clause (f) or clause (g) or clause (j), he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both.
If we look at clause l it states that if a person attempts to commit or abets the commission of any of the offences mentioned in clauses (a) to (k) he shall be punishable, whereas all the clauses (i), (ii) & (iii) as mentioned above uses the word Tax Evaded or ITC Wrongly Availed or Utilized or Refund wrongly taken. The person who is attempting to commit any of the aforesaid offences and caught at that point of time might not be prosecuted due to the wordings of the clause (i), (ii) & (iii).
Where any person convicted of an offence under this section is again convicted of an offence under this section, then, he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to five years and with fine.
Sub section 5 states that the offences specified in clause (a) or clause (b) or clause (c) or clause (d) of subsection (1) and punishable under clause (i) (i.e. amount exceeding Rs 5 Crore) of that sub-section shall be cognizable and non bailable.
All other offences other than as mentioned in sub section 5 shall be non cognizable and bailable.
For prosecution under this section prior approval of the commissioner is required.
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