Compounding of offences allows payment to terminate GST prosecution after tax, interest and penalty are paid.

The Commissioner may compound offences under the Act, before or after prosecution, on payment by the accused to the Central or State Government of the prescribed compounding amount, provided tax, interest and penalty for the offence are first paid. The statute prescribes minimum and maximum compounding amounts, lists categories of excluded persons and offences, and states that compounding bars further proceedings under the Act and causes related criminal proceedings to abate.

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