QUANTUM OF PENALTY UNDER THE IGST ACT

[Sadanand Bulbule]

Dear experts

1] In terms of 4^th proviso to Section 20 of the IGST Act, the amount of penalty to be quantified/levied is the sum total of the amount of penalty “payable “under the CGST Act plus the SGST Act or the UTGST Acts. As such there is no independent provision of its own under the IGST Act to quantify the amount of penalty. Rather it is working under the borrowed provisions of the CGST/SGST/UTGST Acts.

2] In this scenario, what emerges is that, the quantum of penalty under the IGST Act is entirely dependent upon the penalty “payable” under the CGST/SGST/UTGST Acts.

3] The real question that arises here is, assuming that if there is zero liability of penalty under the CGST/SGST/UTGST Acts, whether the penalty payable under the IGST Act should also be zero in view of the controlling penalty provisions of the CGST/SGST/UTGST Acts? Or else, what should be the quantum of penalty under the IGST Act under the circumstances that compel to levy it?

4] Whether the rate of penalty under Section 73/74 need to be reckoned for the purpose of penalty under the IGST Act also, despite there is no liability to pay penalty under Section 73/74?

5] The adjudicating authorities are standing at cross roads?

Experts to throw spotlight on this.

AI Summary

Experts Debate IGST Penalty Calculation: Should Zero Penalty Under CGST/SGST Mean None Under IGST? Complex Interdependence Highlighted. A discussion on the quantum of penalty under the IGST Act reveals that the penalty is derived from the sum total of penalties under the CGST, SGST, or UTGST Acts, as the IGST Act lacks independent penalty provisions. Experts debated whether a zero penalty under CGST/SGST implies no penalty under IGST. Some argued that penalties under IGST should align with CGST/SGST, while others suggested that penalties might still apply independently. The conversation highlighted the complexities of interpreting penalty provisions and the interdependence of GST Acts, with a consensus that penalties under IGST are not automatically nullified by the absence of penalties under CGST/SGST.