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

Penalty under IGST may be calculated as sum of central and state penalties or imposed independently.
The issue is whether IGST penalty is calculated solely as the sum of central and state penalties under the proviso or whether the IGST Act can independently impose penalty by applying central Act provisions mutatis mutandis. Interpretive focus rests on the proviso's wording, the distinction between "leviable" and payable, and the mutually inclusive operation of central, state and IGST provisions, yielding practical consequences for computation, independent IGST adjudication, and avoidance of duplicate penalties.