GST Penalties And Appeals

The Goods and Services Tax is a One Nation One Tax introduced with the intention to eliminate the cascading effect of taxes and to bring a uniform tax structure all over the nation. The Destination based is structured in such a way that every single GST taxpayer follows the strict compliance procedure in order to avoid fraudulent acts and to increase the ease of smooth business function. 

Every single transaction from the source till it reaches the destination is tracked and recorded to maintain accuracy and to boost the export and manufacturing activities between the manufacturers and the final consumers. 

Penalties under GST:- 

Penalty for Fraud - Every single GST taxpayer who has intentionally committed a fraudulent activity w.r.t provisions of GST is liable to pay a 100% penalty, which is equal to the amount of tax they have evaded subject to a minimum of ₹10, 000. In the cases, where the taxpayer has committed a mistake without any intention to commit fraud he is liable to pay a penalty of 10% subject to a minimum of ₹10,000.

When the person, is not a taxpayer under GST but:- 

1. Commits fraud himself or helps a registered GST entity or a person
2. Acquiring or receiving goods and services knowing they are against the laws of GST 
3. Fails to issue the true invoice or fails to maintain the books of accounts and does not appear before the relevant authority upon a summon issued in his name to attend  GST hearing. 

Then is subject to pay a penalty of ₹25,000.

When the fraud is ascertained, he may also be subject to a Jail sentence as specified in the acts of the GST regime apart from paying the penalties.

1. When the amount of tax under GST sums up between ₹50lakhs to ₹100lakhs he is bound to serve the jail term for a period of 1 year along with his penalty being paid. 
2. When the amount exceeds 100 lakhs, but less than 500 lakhs he has to serve the jail term for a period of 3 years plus his penalty. 
3. When the amount exceeds 500lakhs or higher then the jail term is for 5 years and has to also pay his penalty. 

Penalty/Late Fee Under GST -

1. When a taxable person delays paying his GST returns he is liable to pay a late fee of ₹200 i.e. ₹100 for CGST and ₹100 for SGST. There is no late fee on IGST. The maximum late fee is ₹5000.
2. Along with the late fee, he is also liable to pay interest of 18% per annum which is calculated by the taxable person on the amount of the outstanding tax to be paid. The time period starts from the next day of filling till the date of payment. 
3. The late fee for not filing GSTR-1, GSTR-3B, GSTR-4, GSTR-5, and GSTR-6 within the due date is reduced to ₹50 per day. 
4. The late fee for filing NIL returns has been reduced to ₹20 per day of delay for taxpayers. 

Note: If the GSTR is not filed for a given quarter/month, then the taxpayer cannot file his next quarter's returns either. 

Appeals under GST -

In the case where a registered taxable person or an entity is unhappy with any GST penalties regarding the decision or orders by the adjudicating officer, he has the liberty to appeal against such an order to the First Appellate Court. 

*Adjudicating Officer – A competent person/authority who has the power to pass a decision or order. 

If the taxpayer is still unhappy then he can proceed with his appeal to the National Appellate Court, then to the High Court, and still being unsatisfied can finally appeal to the Supreme Court of Justice. 

All his appeals will be entertained only when the same is filed as per the prescribed forms and a minimum of the amount is paid. 

He will have to pay a fee of 100% of his penalty, interest, fee, or the tax amount, and 10% -25% of the disputed amount. 

The taxpayer is also provided a chance to avoid the long process of appealing by making a request to the GST authorities to give a written decision called the advance ruling, before making his appeal.