ITC wrongly availed & penalty levied

[RAGHAV SHARMA]

Respected Members,

One of my client has claimed the excess CGST of Rs 3714 and SGST 3714 in the Financial Year 2018-2019 due to an accounting error. The department has issued the form DRC-01. In the DRC-01, the Proper officer calculated the Penalty of 10000 for each CGST and SGST. How far it is valid to calculate the penalty at 10000 for each CGST and SGST when the total ITC to be reversed is 7428? Kindly guide me in this matter

Thanks

AI Summary

Client Faces Rs 20,000 Penalty for Excess GST Claim; Debate on Mandatory Penalties Under Sections 73(9) and 126 A client mistakenly claimed excess CGST and SGST totaling Rs 7,428 due to an accounting error for the financial year 2018-2019. The tax department issued a penalty of Rs 10,000 each for CGST and SGST under form DRC-01. One respondent explained that according to Section 73(9) of the CGST Act, the penalty is the higher of 10% of the tax or Rs 10,000. Another respondent suggested that penalties might not be mandatory for minor breaches under Section 126, and recommended contesting the penalty. A third respondent supported this viewpoint, indicating potential legal arguments against the penalty.