Consequences of Non-compliance under GST

By Registrationwala

23rd April 2017

 

As the GST Amendment bill has been passed in the Parliament and will be implemented effectively from the 1st of July 2017, a lot of terms and conditions have been set according to that.

In order to check non-compliance under GST, different strict measures have been described. It is highly recommended to mark the following rules in order to maintain non-compliance under GST -

Imprisonment along with fine 

1. If a person is troubling the officer in his/her duty and is trying to destroy any kind of witness, then the person will be sentenced to prison for 6 months along with a specific fine.

2. If the tax evasion or wrong refund is between 50 lakhs to 1 crore, then the person will be sentenced to prison upto 1 year with fine.

3. If the tax evasion or wrong refund is between 1 crore to 2.5 crore, then the person will be sentenced to prison upto three years with non-bailable warrant, along with a specific fine. 

4. If the tax evasion or wrong refund exceeds more than 2.5 crore, then the person will be sentenced to prison upto 5 years with non-bailable warrant, along with a specific fine.

Confiscation of goods 

The person will be penalized with an amount of Rs 10000 or an amount same as that of tax evasion, in the following conditions -

1.  If a person is liable to pay the tax for the goods with he/she is dealing, but don’t have a registered account.

2.  If the person intent to evade the tax by breaching any provisions while dealing with the goods.

3.  If the person is breaching any provisions by using some conveyance in the carriage of taxable goods.

Penalties 

 A person will be penalized with an amount of Rs.10000 or amount same as that of tax evasion, if /she does the following activities:-

1.  Supplying goods without providing a proper invoice.

2.  Issuing an invoice without supplying any kind of goods and products.

3.  Fails to pay the tax to government even after collecting the tax from the consumers.

4.  If the person fails to collect the tax or collects less tax as decided by the government.

5.  Without original receipt of goods/services, taking input tax credit.

6.  Refunding of tax by doing fraud activities.

7.  False financial accounts/ false return filing.

8.  Highly eligible for registration, but dealing without registration.

9.  False information regarding the registration.

10.Dealing with taxable goods without any verified legal documents.

11.Hiding the actual details of turnovers.

12.Not maintaining the daily transaction documents.

13.Using identification number of other registered person.

Cancellation of Registration

These are the following situations in which the registration of the person will be cancelled:-

1.  Not filing returns for continuously six months despite of having a regular transaction.

2.  If the person has not furnished returns for three quarters.

3.  Not commencing business within six months after taking a voluntary registration.

4.  If the registration process has been conducted by any fraud ways or by suppressing certain important facts. 

Interest 

A person will have to pay a specific rate of interest, if the following offences are involved:-

1.  Fails to pay the tax, despite of being liable to pay the tax. The interest will be calculated from the first day itself.

2.  Any kind of fraud activities related to input tax credit and output tax liability. Interest will be calculated over the amount involved in the fraud.

Late fee 

1.  If a person fails to maintain the overall inward and outward supply details by due date, then he/she will be fined with Rs 100 for each day after the due date, subjected to a maximum of Rs.5000.

2.  If the person fails to maintain the annual details or return by due date, then he/she will be fined Rs 100 for each day after the due date, subjected to a maximum of one-fourth of the person’s overall turnover.

As GST is a technology based tax, any kind of non-compliance under GST will be strictly prohibited along with specific penalties and fines. So, it is highly suggested to maintain a proper GST tax as per the regulations of the Government. 

 

Consequences of Non-compliance under GST

2017-04-23