GST UPDATE
Desk of CA. Praveen Sharma
Series- 423
Penalty multiplies for every non-compliance
1- Section 125 of the CGST Act provides for a penalty of Rs. 25,000/- for any contravention, where the penalty is not specifically prescribed.
2- So what happens when a taxpayer makes 3 contraventions? Would they be levied a penalty of Rs. 25,000/- or Rs. 75,000/-?
3- The Madras High Court, in the case of Suvarna Fibrotech Pvt. Ltd. Vs Assistant Commissioner
held that:
? Section 125 is in the nature of residuary provision.
? In this case, there were 3 non-compliances and it was well open to the Original Authority to invoke Section 125 with regard to each of the non-compliances and levy Rs.25,000/- each, which would have added upto Rs.75,000/-.
4- This judgement attempts to answer the lingering question in the minds of professionals regarding scope of Section 125 in case of multiple non-compliances.
What is your view?
CA. Praveen Sharma
Twitter: https://twitter.com/capraveensh
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