Goods Intercepted during Transit On which Applicable Tax Rate is 18% while Tax Invoice Raised for 12% Tax Rate. Therefore Invoice Raised for Tax Value of Rs. 100 on which Tax Paid is 12. E-way Has been made Correctly. Now Calculation of 200% penalty for Tax payable will be Rs. 36 or Rs. 12
Case 1 : Tax Payable on 100 will Rs. 18 while already paid Tax is 12. Therefore Tax Short Paid is 6 on which 200% penalty will be 12
Case 2: Tax payable on Rs. 100 is 18 therefore Penalty under 129(1a) is 36
What does the GST Law/Rules says on this?
Clarification on GST Penalty: Section 129(1a) Doesn't Mandate 200% for Tax Shortfall; Consider Section 125 for Lesser Penalty. A query was raised regarding the penalty calculation under Section 129(1a) of the GST Act when goods are intercepted during transit with a tax invoice showing a lower tax rate than applicable. Two scenarios were discussed: one suggesting a penalty based on the tax shortfall, and another on the full applicable tax. Responses indicated that a 200% penalty for short payment is not applicable, and if the officer refuses to release goods without penalty, a smaller penalty under Section 125 of the CGST Act might be imposed, referencing Circular No.64/38/2018-GST. (AI Summary)
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