TaxTMI 
TaxTMI 
Section 122(1)(vii) provides for penalty for taking the ITC. Section 122(2) also provides for penalty for wrong availment of ITC. Under which situation 122(1) will get attracted under which situation 122(2) will get attracted?
Section 122 of CGST Act, 2017
11 May 2020 
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Penalty for wrongful input tax credit: fraud attracts full-tax penalties while non-fraud cases attract reduced penalty rates.
Section 122 separates penalty regimes: subsection (1) targets specified culpable acts such as false invoices, fraudulent refunds and misuse of input tax credit and prescribes a penalty tied to the tax evaded or irregularly passed on; subsection (2) imposes a two-tier penalty on registered persons for wrongful non-payment, short payment, erroneous refund or wrongful ITC availment, with lesser penalties for non-fraudulent cases and full-tax-linked penalties where fraud or wilful misstatement or suppression is involved. An amendment imposes additional liability on persons who retain benefits of transactions covered by certain subsection (1) clauses. (AI Summary)
Section 122 separates penalty regimes: subsection (1) targets specified culpable acts such as false invoices, fraudulent refunds and misuse of input tax credit and prescribes a penalty tied to the tax evaded or irregularly passed on; subsection (2) imposes a two-tier penalty on registered persons for wrongful non-payment, short payment, erroneous refund or wrongful ITC availment, with lesser penalties for non-fraudulent cases and full-tax-linked penalties where fraud or wilful misstatement or suppression is involved. An amendment imposes additional liability on persons who retain benefits of transactions covered by certain subsection (1) clauses. (AI Summary)