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

Debate on Penalties Under Section 73(11) CGST Act: Mandatory or Discretionary? Insights and Interpretations Shared. A discussion on the imposition of penalties under Section 73(11) of the CGST Act, 2017, debated whether penalties for not paying self-assessed tax within 30 days are mandatory or discretionary. Most contributors agreed that the use of 'shall' in the statute indicates that penalties are mandatory. However, a circular clarified that penalties under Section 73(11) are generally not imposed if tax is paid late but before the due date, suggesting a general penalty under Section 125 might apply instead. Participants shared insights and interpretations but noted that these should not replace professional advice.