Penalty Payable under Section 129(1a)

[Manav Saurav]

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?

[Shilpi Jain]

While goods are intercepted, questions regarding rate of tax, PoS, value of supply, etc. cannot be questioned. If there is any discrepancy in that then notice under s 73/74 should be issued. 

200% penalty cannot be levied for this short payment, if any.

[Sadanand Bulbule]

Dear querist

In case of the above situation, if the proper officer is refusing to release conveyance/goods without penalty by way of treating such invoice as invalid, then penalty to the tune of ₹ 500/- each under section 125 of the CGST Act and the respective State GST Act be imposed (Rs.1000/-under the IGST Act) in terms of Circular No.64/38/2018-GST,dated 14th September, 2018.

AI Summary

Penalty under Section 129(1a) limited where rate dispute exists; short-payment should attract notice under sections 73/74.
Where goods intercepted in transit bear invoices taxed at a lower rate than applicable, rate and value disputes should not be determined at seizure; short payments ought to be addressed by issuing assessment notices under sections 73/74 rather than imposing a 200% penalty under Section 129(1a). If officers refuse release of conveyance/goods by treating invoices as invalid, statutory per-conveyance penalties and IGST-related penalties may apply as indicated in Circular No.64/38/2018-GST.