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Penalty and Prosecution Under GST

GST, as we all know, has been hot topic from day it is implemented in India. It is introduced as single tax for all. So no need to pay tax at different level and it is also an effort to stop corruption in India.

As we all know the rules set for GST is very strict and Registration under GST is compulsory.

Prosecution Under GST

It is a process against person/businessman found guilty by deliberately doing offence & for such cases action is taken.

Step by step Guide


(Note: Penalty in this case is 100% or min Rs10, 000 which is higher will be counted as penalty)

  1. Invoice is compulsory and should be correct while supplying goods/services
  2. Bills –only when supplying goods/services else it will be counted as GST violation.
  3. GST Num-it should be correct and person should not be use of other taxable person.
  • No Tricks

(Note: found guilty for fraud case will be fined 100% penalty or min 10,000rs whichever is higher.

  1. Submit right information: Playing tricks for reduction in tax is illegal and can create problem
  2. Records: It should be clean and clear any fake record for avoiding tax can be problematic and illegal too.
  3. Information: keep your intention clear and provide correct information during proceedings.
  • Pay tax don’t escape

    • Pay collected TCS within 3month time (late fee 100 per day & CGST AND SGST makes total to 200rs there is no late fee in IGST.)
    • Bills should be up to date and correct according to GST, wrongly collected should be given to GOVERNMENT within 3month.
    • No tricks should be use by Businessman for refund of any CGST/SGST because it is illegal.
    • Receipts should be original and don’t show credit or input tax credit without any proof or if it’s not real.
    • Show correct Income and do not suppresses sales to avoid tax.
  • Goods Supply

    1. Good should be transported with proper document
    2. Supply should be of own good not of others.
    3. Tricking with goods when it is seized is illegal.
  • Business man also needs to know other things

    1. Compulsory registration under GST for safety
    2. Deduct correct TDS only which is applicable according to Bill
    3. Collect only right TCS which is applicable according to Bill
    4. Don’t avail or distribute Input tax credit because it comes under GST violation
    5. Allow GST officer to do his job while he is on duty obstructing officer can cause problem.
    6. Maintain regular books, receipts all according to billing procedure.
    7. And last but very important is Do not try to destroy evidence if found guilty else that person can be come under severe punishment.

After all these points let us now see how penalties are given and what are rules related to it.

Penalties are given on the basis of report intentionally or unintentionally

if unintentionally for example: less than 5000rs in payment such cases warning is issued to that person as it is a small case.

  • Imposed for HUF(HINDU undivided Family) LLP, TRUST etc partners are also liable if found guilty and for company, a person who is handling GST matter for firm will be found as guilty and he will be liable for punishment.
  • Now let us see some severe punishments if a person is convicted according to law
AMOUNT Punishment
Upto 1 crore/rs Jail for 1 year and also penalty
Upto 2 to 5 crores Jail for 3 years and also penalty
Above or upto 5 years Jail for 5years and also penalty

What to do if found Guilty?

When a person is found guilty under GST, if he doesn’t want to make process lengthier tax payer can urge for advance ruling under GST, he/she should clarify to GST authorities.

And if a person is sure that he has done nothing wrong can appeal to appellate authority than appellate tribunal if things are not getting short out than can go to high court and last to the supreme court against GST notice.