Imposition of penalty u/s 73(11) of CGST Act, 2017

[SUBRATA RAY]

Is it mandatory to impose penalty u/s 73(11) if self assessed tax is not paid within 30days from due date for payment of tax or is it discretionery power of proper office who iisued the SCN.what are defence can be taken to counter levy of penalty

[KASTURI SETHI]

Yes, penalty is mandatory under Section 73 (11) of the CGST Act. Note that Sections 73 (11) and 73 (9) both contain the words, 'shall' be payable'. Here the word, 'shall' signifies that imposition of penalty is mandatory.

[Shilpi Jain]

73(11) talks of self-assessed tax

If you can put in what is ur exact scenario maybe the input could be specific

[KASTURI SETHI]

The use of word, 'shall' in the statute indicates that it is mandatory and the Assessing Authority does not have power to dilute this mandatory requirement.------Supreme Court in the case of ALD Automobile (P) Ltd. 2018 (10) TMI 814 - SUPREME COURT. However, this judgement is in relation to the input credit. Here we are concerned with the meaning, essence and power of 'shall'.

[Amit Agrawal]

Kindly refer to answers given against Serial No. 2 of Circular No. 76/50/2018-GST dated 31st December, 2018, wherein it is clarified as follows:

"...........

3. The provisions of section 73 of the CGST Act are generally not invoked in case of delayed filing of the return in FORM GSTR-3B because tax along with applicable interest has already been paid but after the due date for payment of such tax. It is accordingly clarified that penalty under the provisions of section 73(11) of the CGST Act is not payable in such cases. It is further clarified that since the tax has been paid late in contravention of the provisions of the CGST Act, a general penalty under section 125 of the CGST Act may be imposed after following the due process of law."

These are ex facie views of mine and the same should not be construed as professional advice/suggestion.

[SUBRATA RAY]

I am at par with you Amitji. These defence is most suitable for giving reply against SCN u/s 73(11) .

Thanks

[SUSHIL BANSAL]

Yes, penalty is mandatory under Section 73 (11) of the CGST Act.

AI Summary

Penalty under Section 73(11) may not apply where tax is paid late; general penalty provisions may instead be invoked. Debate exists whether the statutory 'shall' in the specific penalty provision makes imposition mandatory; however Circular No. 76/50/2018 states that where tax is paid late in returns like GSTR 3B, section 73 penalties are generally not invoked and instead a general penalty may be imposed after due process, so defences to an SCN should emphasise late payment and the circular's guidance to counter a levy under the specific provision.