Nowadays Social Media is abuzz with an Alleged Show Cause Notice for Penalty for non-issuance of Tax Invoice, issued under APGST Act, 2017 by Anantapuram Division, Dharmavaram Circle, Department of State Tax, Government of Andhra Pradesh dated 05.09.2017 by which department has proposed to levy a Penalty of Rs. 20000/- for Tax Evasion of Rs. 15.

We have not confirmed the issue of same from concerned department so we cannot comment if the alleged show cause notice has actually been issued by the department or not. But if the same is been issued by department than it’s a very wrong and dangerous precedent and a signal for dealers on what they can expect in coming days.

Such notices are not in right taste at this stage of GST implementation when Government is rejecting GST Registration for their own mistakes and fails to register the dealers even after a month of application.

Further update- Department has even collected the penalty amount too from the Tax Payer on 08.09.2017. We have copy of Challan with us which was paid online.

Readers are requested to share their views on impugned Show Cause Notice. Copy of the Show Cause Notice doing rounds on Social Media is as follows :-

GST SCN

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63 responses to “Rs. 20000 Penalty for GST of Rs. 15”

  1. This is in relation to interest paid for under construction property under 24(2). In case of investment made under 54F, if possession is not given within 3 years, even then capital gain exemption is allowed.

    But what about interest exemption u/s 24(2), whether one can claim exemption even if one does not get possession in three years time.

    Also, in cas eof settlement with the builder, if one gets some delayed interest which is less than what he had paid, whether one can claim exemption for the difference . if yes, then under which section.

  2. aanAnd Mineeyar 431001 MH says:

    As per rule 2(b) of tax invoice dealer has to right to not issuing of invoice, if customer not require upto rs.200/-.
    But if dealer is charging the tax to customer, it is his duty to make invoice. Without it how can he calculate the payable tax, return. By not generating invoice dealer may show adjusted amount of sales which may differe than actual sales. Thus this action means to collect the tax from customer n show low amt of sales n pay tax as per working not as per actual. Then the action creates reaction from dept.

  3. JATIN says:

    I think this penalty is not a valid penalty under section 126(1) CGST act No officer under this Act shall impose any penalty for minor breaches of tax
    regulations or procedural requirements and in particular, any omission or mistake in documentation which is easily rectifiable and made without fraudulent intent or gross negligence.
    Explanation.––For the purpose of this sub-section,––
    (a) a breach shall be considered a ‘minor breach’ if the amount of tax involved is less than five thousand rupees

  4. John says:

    Some of them are collecting GST without removing the previous taxes.
    Some of them are collecting GST even without getting a GST No.
    Cyclestands of most of the railway stations are collecting GST without a GST No.
    Now who will take action against them. And what penalty they are going levy on them ?

  5. S.Muthu Vijayan says:

    This is Draconian at the initial stage of GST implementation.

  6. g c pramanik says:

    such kind of bureaucrats want to give massage among the public that implement of GST is against the people and against the Democracy therefore they are misusing the power conferred by the Govt.
    However the rule maker is also in wrong , therefore penalty amount should not exceed equal to tax evasion e.i. Rs.15.00

  7. S A KANAKA RAJ says:

    SAME DEPARTMENT PERSON, TODAY VISITED THE SAME PREMISES AND MAKING HARASSING TO THE SHOP PEOPLE, AND FORCE TO TAKE SIGNATURE ON THE STATEMENT AND HE TELLING TO THE CUSTOMER OF THE SHOP NOT TO PURCHASE IN THIS SHOP. STILL NOW WHY THE AP GOVT NOT TAKEING THE ACTION AGAINST HIM. WHAT THE MEDIA DOING.

  8. A K ABROL says:

    THIS IS HIGH HANDEDNESS ON THE PART OF DEPARTMENT TO PUNISH THE ASSESSEE

  9. B S NEGI says:

    Actually State tax officer are not yet aware about GST, They are still in haven of old regime.

    Need them proper education on GST, if this SCN is correct-

  10. CA Mohit Sharma says:

    FROM WHERE DEPARTMENT IDENTIFY THAT PROPRIETOR WILLFULLY VIOLATE THE PROVISIONS OF SECTION 31.

  11. Mohit Sharma says:

    FROM WHERE IT IS CLEAR THE PROPRIETOR WILLFULLY VIOLATE THE PROVISIONS OF SECTION 31?

  12. Ram says:

    it’s true too harsh to charge penalty at initial stage even govt. conveyed to be liberal for starting six month. officer can educate such people first and in case of second mistake may charge reasonable amount of penalty. a small shop keeper should not be penalised for such mistake. there is no difference in mistake done by small shopkeeper and company , not justified.

  13. D.Mariapaulrajan says:

    The issuance of notice itself erroneous. There was no stock checking of particular item. The acceptance either in verbal or in writing ought to have been happened on account of duress and coercion. The affected party can claim a good amount of compensation and damages from the Sales Tax Department under tort for the wrong doings of the authorities.
    The remedy can be obtained either through Writ or Civil court.

  14. CA Suraj Somani says:

    I think penalty of Rs. 20000/- for tax evasion of Rs. 15 is not justified . Even if the penalty is to be imposed , the maximum penalty should be restricted to Rs. 15 I.e. amount of tax evasion .

    As GST is altogether a big transformation , errors are expected to be there . So to make the smooth implementation of GST , govt. Should ignore the errors /mistakes for atleast 2-3 months that are incurred by tax payers which are genuine and where there is no intentions n of tax evasion .

    As Govt. Has given some relaxation for filing of GST returns for the month of July and August due to technical issues , same way they should provide relaxation to tax payers for such type of errors by giving warnings and no Penalty should be imposed as this will cause undue hardships to the tax payers .

    In Current case , department has imposed penalty of Rs. 20000/- on tax evasion of just Rs. 15 /- which is almost 133333.33% of tax evaded amount which I think not any of the law has such a harsh penalty that too for the genuine reasons.

    So , considering all the technical and other issues during transition period , department should provide some relaxation to such errors for next few months . This does not mean that tax payers should commit mistake .

    Thank You ..!!

  15. satish says:

    Grate Job by Department.
    There is a class of people in our society who consider ‘not paying tax’ is their fundamental right. This must change.

  16. PREM KRISHNA says:

    As now it is initial stage , the Govt. Should not in such a way impose penalty. Because we are transforming from a system to new system where in first of all every business men should be made aware of the consequence of issuing invoices without bill for some period and then the Govt shall issue impose penalty. Any way we should not also tax evasion.

  17. Sujatha Putra Sudheer says:

    I agree & Welcomes Commissioner decision to collect penalty & It’s also necessary for Govt Dept to Train the small business men in these matters.

  18. S.M.Periwal,Adv. says:

    Unjust and harsh action in the present scenario.

  19. S.M.Periwal,Adv. says:

    Legally the A/O may be right but taking such harsh action in the present scenario is unjust and harsh.

  20. raman lal gupta says:

    The amount of penalty should be a logical and reasonable proportion of the tax sought to be evaded and not like ridiculous figure in the instant case.
    HURRA the govt system and its implementation.

    Raman Lal Gupta

  21. T S V DIWAKAR says:

    Mistake is Mistake. This is only exemplary. One should take as a example and do properly.

    When the dealer himself confessed and there is no other go to the authority except penalizing him.

  22. shamsuddin says:

    Why can’t the government generate its own income to reduce the tax burden of the poorest country in the world, if every thing is extracting from the people like sucking the blood of poor, then why we need government and the so called prime ministers and ministers

  23. B.B.GUPTA says:

    Now it is time to impose tax at First Point only.
    You can increase rate of tax and others should be in Free Economy. Lacs of businessman will be free to do their business, now all are busy in paper work. Make economy free and do the business freely..

  24. Prabhat Saxena says:

    Bad precedence Not expected. There should be a limit to such atrocities. It can only be an error or thru oversite. No one in business shall do so.

  25. GERARDUS MOL says:

    My company git a privisional GST number because in the orevious tax regime we were registered under VAT and Luxury tax. Because our annual turnover is kess than Rs. 29lakh I am trying since 1st of June to cancek my GST online through GST FORM REG-29 but the GST common portal is still not providing that facility. Enquiries to the GST Helpdesk and mails ti CTO are of no use because we don’t get any help or guidance. The date to cancel GST expires on 39 September 2017. WHAT TO DO?

  26. C V M Srinivas says:

    I think the place Dharmavaram is in Aanthapuram District. No wonder what the Act says is being implemented. What kind of awareness does the shopkeeper has about GST.

  27. NAVEEN says:

    Department has also collected the penalty amount.

  28. Ayasa kanta says:

    It’s very unfortunate

  29. Vijay Kumar says:

    Ease of Business?
    If this is GST, it would be better reversed to the original Excise/VAT/Service Tax etc.
    2. Not only this, even late filing of TDS return, TCS return attracts penalty of Rs. 200/- per day?
    Is it fair? Is it fair for business/businessman?

  30. NIKHIL AGARWAL says:

    GST has been applicable but government are not handling the total process effectively. Return date also extending time to time. Customers has been entered in a big problem. It is not a right task by government to issue a notice of rs.20000 for not deposit a 15 rs. tax

  31. harendra khira says:

    I oppose this law and system which is not lawful
    here in Maharashtra thane mumbra police handle the gst law to harassed traders for they dump scrap in mumbra uttar shiv and have invoice too but address of buyer in kurla or darukhana which ever be there they saying you not able to scrap unloading here in mumbra uttar shiv and taking bribe about 20000 to 50000 rupees for unloading scrap in uttar shiv godown even they have original invoice.with gst paid invoice.

  32. S GANGULY says:

    I think the Govt Officer has not sufficient knowledge in the matter.

  33. Mihir says:

    There are few question arises on this issue. Whether the retail shop is registered under gst or not as it may fall under threshold limit. 2. Whether it can be treated as continuous supply or not . 3. What is the motive of tax officer behind this demand issued to a shopkeeper.

  34. Arun S. Karnik says:

    The fact that a fine of rupees 20,000/- has been imposed for not charging GST of rupees 15 no doubt sounds odd.
    However, the law has granted exemption from GST to dealers having turnover lower than rupees 20 lakh. Presumably, the person being fined has a turnover of more than Rs. 20 lakh. So, preparing a tax invoice should not have been such a great difficulty.
    Unfortunately, in this country there is a deep rooted tendency to evade tax,and endeavor is to avoid paying tax as far as possible. People need to realize that times have changed and it will be extremely difficult to escape the tax net in the new era. In fact, complying with the tax law must become way of life for all Indians. As the honorable Finance Minster Mr. Arun Jaitly has rightly observed, there is a class of people in our society who consider ‘not paying tax’ is their fundamental right. This must change.

    • Sridhar says:

      Expending public money and having no proper planing to rulethe public also penalized.after expending so much money there no proper implementation of the act.extending days day by day and people sitting before computer and hitting around the bush for bird which is not there.

  35. Chandra Kishore Vandhare says:

    govt officials should be aware with the law and be practical with the day to day problem with GST regim and should be helpful nor a tourchering department

  36. Vinod Kumar Tyagi says:

    The said notice looks technically erroneous in nature for following reasons.
    1. Each show cause notice has a number, which this notice does not have.
    2. In the show cause notice, a warning to impose the penalty, if a satisfactory answer is not received within the specified time is not received, is given.
    3. In the case of show cause notice, a time to show the cause is given which is never just three days.
    The said notice, therefore, looks unthoughtfully issued.

  37. Sanjay Amberkar says:

    During initial stages of GST, Small or Big Traders should not be penalized, their ratings should be impacted and sale without Invoices should be banned, As India is country where Invoices are sold on a large scale. To criticize any Govt is simple, our Forum should help our members to educate as their is solution for every problem. Also pls. note that Modi Govt. has implemented GST as previous laws had various loop holes, and their were no connection between them. Lets make our Forum “KNOWLEDGEABLE” one.

  38. P. K.PATHAK says:

    The state officer should be punished for misleading the trade by issuing this type of SCN. Govt. should take action against the officers and taxguru is also requested to publish the decision of Govt. in their news so that the traders should not be feel harassed with the wrong action of the state officers.

  39. Bajrang Lal Kejariwal says:

    First of all as far as I know the upper limit of penalty is Rs.5000.00 each for IGST, CGST & SGST then why Rs.1000 + Rs.10000 are imposed.
    Secondly, the GST is not yet implemented properly and is still in initial phase the penalty should not be imposed. Only a demand for Rs.15 should be raised without any interest and penenty.

  40. nikunj says:

    One country one tax is good initiative by government but isituation for small traders will be very dufficult to comply with the GST rules. It will be difficult to afford to maintain books . Where are the man power to help them. The govt. should think on these issues otherwise small traders will be no where. The law maker should consider the problems faced by businesman.

    • anuradha says:

      I think small traders are beyond the vision of the government as development of huge corporate houses can be show cased as developed for the purpose of winning elections. Not that of small traders or employees.

    • H R SHENOY says:

      Although the penal action should not be initiated in the first 3 months for the public / Traders to become fully aware of the GST law. However, it is necessary that penalty would be stringent such that traders don’t take chance / risk of doing business without cutting bills.
      Regarding small traders, there is always simplified GST of Composition Tax of 1% flat, so compliance should not be all that difficult and Traders with annual Turnover of less than Rs.20 Lacs need not even Register under GST.

  41. Kanuparthi Murahari says:

    Section 122 reads “Where a taxable person who supplies any goods or services without issue of any invoice he shall be liable to pay a penalty of ten thousand rupees or an amount equivalent to the tax evaded” but here Govt. Officials also violated GST Laws, it’s a shame for AP Govt. public will unite & fight this type of errors

    • anuradha says:

      Please read the section completely. It talks of either the tax evaded or 10000 whichever is higher. The SCN is technically correct. It is the governments greed to collect more tax by instilling fear in the traders.Otherwise there is no justification for 28% tax when you have RCM and input tax credit matching system in place.

    • CA. Bhavesh Savla says:

      The article itself and some of the comments here are strange. No one is questioning the wrong doing of the shop keeper. He was collecting GST from his customers but was not depositing them. The clear intention was visible on not issuing tax invoice. And its wrong to say that its only Rs. 15. That was the amount caught. On audit, it will be clear how many goods he has sold without GST invoice and how many rupees he has collected from customers and not deposited to Government. Mr. Kanuparthi mentioned section 122 above saying penalty is Rs. 10000 . Thats correct but your interpretation is wrong. It is 10000 for SGST and 10000 for CGST. So total penalty is Rs. 20000. In fact the notice for penalty also gives the break up. Coming to Raja;s comment which says that businessman is paying taxes , it is actually the opposite of what has happened here. The businessman has collected but not paid. If he actually pays the penalty this time, he will remember it for life time and will forget all black money. This will be reflected in his income tax return also from now onwards.

  42. Siva says:

    Plz send full image

  43. Raja says:

    Than all business men in India should stop doing business and should sit at home idle. Than this useless government officials know from they r getting salaries. It is we actually collecting taxes and paying in government treasury like donkeys. They r enjoying the feast by issuing useless penalties and interest for useless government provisions which r practicality impossible.

    • anuradha says:

      The intent of Act is to create a sense of fear of non-compliance. Blaming the government servants for performing and not-performing is unjust to say the least.

    • SUHAIL AKHTAR says:

      YOU R RIGHT SIR

    • Shital says:

      Yes I agree … But even we sit idle at home … this government will not worry … U remember jewellery strike before some months … Nothing happens..like that again nothing happen here Also… Govt decided to destroy our nation..

  44. Jairam Undale says:

    In such minor cases penalty should be twice the tax evaded. However incae of large units, the penalty must be more than Rs 20000

  45. sundararajan.s says:

    Rs.15 or 15lakhs ,selling without bill is punishable. I fully endorse the tax official’s action. We have to encourage this .

    • shamsuddin says:

      you will only encourage to make the poor suffer, the govt treating people like slaves and sucking their blood. you will never rise your fingers how these blood money misusing and lavishly spending by your govt,

  46. Sunil Rahwani says:

    GST kabi success nai hoga ye modi ka kehna tha aur ye woh khud karke dikha raha hai aisa immandar PM dekha hai kahin jo kahe aur karke bhi dikhaye
    I personally Salute to Our PM he is the greatest PM for our Nation
    Aise namune baar baar nai aate hai so respect him till he leads our nation

    • Vikash says:

      GST is another exaple how our govts n officers are working. No vision, no preperation. Nation cant run on twitter n FB.

    • Amolg says:

      Your concerns are acceptable over the issue.But look at your words towords PM of our contry.

    • Hari Baldawa says:

      Sunilbhai, namune ko leke chatenge kya. Wunhone na apni biwi ko bhi parayi kardi aur bacche ki to baat nahi. We are sincere family people and accept every aspect of complete family respect with grace. He doesn’t know family and children, that’s why he doesn’t understand reality of small and family businesses. We are the one who create major employment in country.

  47. Narayan guptha says:

    This type of selling consumer goods for a price inclusive of GST , without bill is happening in our city also. . I think this is a innovative way to bring these traders to legal trading habit. I fully endorse the tax official’s action. We have to encourage this .

    • S A KANAKA RAJ says:

      SAME OFFICIAL VISITED THE SAME PREMISES AND HARASSING TO THE SHOP OWNER, NAD TELLING TO THE CUSTOMER NOT TO PURCHASE IN THIS SHOP. FORCING TO THE SHOP OWNER TO MAKE THE SIGNATURE IN THE STATEMENT. TODAY THEY HAVE CALLED TO MY MOBILE AND TOLD REGARDING THIS ISSUE.

  48. Bhuma Iyer says:

    Thank you for sharing this. Appreciate it. I think is audacious and ridiculous if such a penalty is imposed for a small minuscule amount.

    I do agree that this is a dangerous precedent. And it would put off small and medium enterprises and traders and I feel this can also lead to mass rebellion.

    This is a sad day for all the people in India engaged in businesses – small, medium or large. I for one will quit working independently if such a things is imposed.

    Friends, let’s all unite and fight this injustice which is imposed on us on the guile of GST .. (sab ka haal and government ka bhala)

  49. Ashok says:

    Still GST is initial phase. I think it is very strange to issue a notice of Rs. 20K against of Rs. 15.

    • Adv Ashok Kr Sharma says:

      very very unfortunate to issue a notice for Rs.20 k as penalty against tax evasion of Rs.15/- concerned govt.officials should think that they are really representing Govt.

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