TaxTMI 
TaxTMI 
During audit under gst department raised demand named as audit observation.. with interest and asked to pay penalty of 15%. The assessee is paying within 30 days of issue of audit observation...
Is the view of charging penalty is correct???
PENALTY DURING DEPARTMENTAL GST AUDIT
06 Aug 2021 
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Penalty in GST audits may apply for fraud-related tax shortfalls; consider contesting or paying to close proceedings.
Where a departmental GST audit finds a tax shortfall due to fraud, wilful misstatement or suppression of facts, a penalty (commonly fifteen percent in audit practice) may be levied; shortfalls for reasons other than fraud generally do not attract penalty. No penalty should be imposed without giving the person an opportunity of being heard, and an audit observation can be contested through subsequent show-cause proceedings, though contesting may risk higher penalties and added litigation costs. (AI Summary)
Where a departmental GST audit finds a tax shortfall due to fraud, wilful misstatement or suppression of facts, a penalty (commonly fifteen percent in audit practice) may be levied; shortfalls for reasons other than fraud generally do not attract penalty. No penalty should be imposed without giving the person an opportunity of being heard, and an audit observation can be contested through subsequent show-cause proceedings, though contesting may risk higher penalties and added litigation costs. (AI Summary)