GST Council: Decriminalisation of Offences

Decriminalisation of offences under GST law on the agenda of the 48th GST Council meeting.

The 48th GST Council meeting was held on December 17.
The decriminalisation of GST-related offences, provisions relating to e-invoicing, the handling of statutory dues under GST laws, the taxation of online gaming and casinos, and the creation of the GST Appellate Tribunal are just a few of the many topics that the full indirect taxation body is likely to discuss today.
The council will discuss the proposal to raise the bar for criminal prosecution for GST offences to more than Rs 20 crore.
To make the GST Act more taxpayer-friendly, the Council is also likely to propose eliminating the criminal offences that are currently covered by the Indian Penal Code (IPC) from it.
The law committee of GST officers has finalised the changes in Section 132 of the GST Act as part of the exercise to decriminalise the law.

There are 21 offences under GST. For easy understanding, these have been grouped into heads as given below:
Fake or wrong invoices
- A taxable person supplies goods/services without any invoice or issues a false invoice.
- He issues any invoice or bill without the supply of goods/services in violation of the provisions of GST.
- He issues invoices using the identification number of another bona fide taxable person.
Tax evasion
- He collects any GST but does not submit it to the government within 3 months.
- Even if he collects any GST in contravention of provisions, he still has to deposit it to the government within 3 months. Failure to do so will be an offence under GST.
- He obtains a refund of any CGST/SGST by fraud.
- He takes and/or utilises input tax credit without receiving goods and/or services.
- He deliberately suppresses his sales to evade tax.

What are the penalties under GST?
- If any offences are committed, a penalty must be paid under GST.
- The principles on which these penalties are based are also mentioned by law.

The Joint Commissioner of SGST/CGST may have reasons to believe that to evade tax.
- A person has suppressed any transaction or claimed excess input tax credit etc.
The Joint Commissioner may give the go-ahead to any other CGST/SGST officer to inspect the alleged evader’s place of business.

Firstly, the Joint Commissioner of SGST/CGST can order a search.
He will order a search based on the results of the inspection (or other reasons) if he has reasons to believe:
- In addition, there are goods which might be confiscated.
- Any documents or books or other things which are hidden somewhere. Such items can be helpful during proceedings.

Firstly, in relation to a criminal charge, the prosecution is pursuing legal action against someone.
Anyone who violates the law to defraud is subject to legal action under the GST, which includes criminal accusations.
Several instances of these offences include
- Issue an invoice without supplying any goods/services- thus taking input credit or refund by fraud.
- Obtaining a refund of any CGST/SGST by fraud.
- Submitting fake financial records/documents or files and fake returns to evade tax.
- Helping another person to commit fraud under GST.

Appeals

A person unhappy with any decision or order passed against him under GST can appeal against such a decision.
The first appeal against an order by an adjudicating authority goes to the First Appellate Authority.
Suppose the taxpayer is not happy with the decision of the First Appellate Authority. In that case, they can appeal to the National Appellate Tribunal, the High Court, and the Supreme Court.

General Rules Regarding Penalty

These penalty rules are generally the same in all laws, whether tax, contract, or any other.
- Every taxable person on whom the penalty is imposed will be served with a show-cause notice first and will have a reasonable opportunity of being heard.
- The tax authority will explain the reason for the penalty and the nature of the offence.
- When any person voluntarily discloses a breach of law, the tax authority may use this fact to reduce the penalty.

Pic Courtesy: The Hindu

Content Source: The Hindu