There are certain offences specified under Central Goods and Service Tax Act, 2017, which if committed by any business, person or if any other person abets him in committing such offence then they will be liable to such punishment including imprisonment.
1. If no invoice is issued for supply of goods or services or both as per the prescribed norms of the Act or rules made thereunder, with an intention to evade taxes.
2. Second situation is just the opposite of the previous one, where invoices are issued but no goods or services are supplied in real. This is done with an intention to wrongly avail the benefits like Input Tax Credit, or such credit is actually availed.
3. Tax is collected for any sale done, but tax liability incurred in the process is not paid to the government within 3 months from the date it becomes due.
4. If the person or business is involved in tax evasion or fraudulently claiming Input Tax Credit or refunds from the department.
5. Falsification of accounts, invoices or any other records with an intention to evade tax.
6. If the person or business is obstructing or preventing any government officer from discharging his official duties.
7. If any person or business is purchasing, supplying, deals in any other way or is in possession of such goods which he has a reason to believe are liable to confiscation under law or rules made thereunder.
8. If any person is supplying or is in any way dealing with the supply of services which are in contravention with the provisions of the law or rules thereunder.
9. If he is destroying or tampering any material evidence or documents.
10. If any information is required under the laws or rules made thereunder, and the person fails to supply such information and if supplied false information.
In the case of Tax Evaded, Wrongful ITC taken, Wrongful Refund claimed:
Case 1: 500 Lakh Rupees and more - Imprisonment up to 5 years and Fine
Case 2: 200 Lakh Rupees but less than 500 Lakh Rupees - Imprisonment up to 3 years and Fine
Case 3: 100 Lakh Rupees but less than 200 lakh Rupees - Imprisonment up to 1 years and Fine
In case if any person has committed or abets in the commission of any offence including Falsification of records, Obstructing any officer in discharging his duties, or Deals in any goods he knows are liable for confiscation Then such a person will be liable for imprisonment up to 6 months or fine or both.
1. In case if any person is once charged under this Section, and is again charged under this section. Then in such second charge or any other subsequent charge under this section, such person will be punished with an imprisonment up to 5 years and fine.
2. If any person is charged with any punishment stated in the table above or is a repeat offender under this section as stated in the point above the shall be punishable with imprisonment for a period not less than 6 months.
3. Previous sanction from Commissioner is necessary for any person to be punished under this section.
4. If any offence is committed including;
- Tax evasion or
- Wrongful claim of ITC or
- Wrongful claim of Refund
- And where the amount involved exceeds 500 Rupees and it is punishable with an imprisonment up to 5 years and fine,
Then such an offence will be considered as a cognizable offence. Cognizable offence means such offence where arrest can be made without an arrest warrant.
So, if you are an entrepreneur make sure you focus on correct implementation strategy of GST. In the case, you want to avoid GST Compliances you can also take GST Composition Scheme if eligible.