Page 5 - Chap21 Offences & Penalties

CCP 21.01.02.00

What is the quantum of penalty for an offence mentioned under section 122(1), 122(1A), 122(1B)
and section 122(2)? [Study Mat]
Answer :
Ü As per section 122(1) of CGTS Act, any taxable person who has committed any of the 21 offences
mentioned thereunder shall be liable to a penalty which shall be higher of the following amounts:-

a) 10,000/- or
b) An amount equivalent to, any of the following (applicable as the case may be):-
i) Tax evaded or
ii) Tax not deducted u/s 51 or short deducted or deducted but not paid to Government or

iii) Tax not collected u/s 52 or short collected or collected but not paid to Government or
iv) Input tax credit availed of or passed on or distributed irregularly or
v) Refund claimed fraudulently.
Ü As per section 122(1A), any person who retains the benefit of a transaction covered u/s 122(1)(i)/

(ii)/ (vii) or (ix) and at whose instance such transaction is conducted, shall be liable to a penalty of
an amount equivalent to the tax evaded or input tax credit availed of or passed on.
Ü As per section 122(1B), Any ECO, who,-
(i) allows a supply of goods or services or both through it by an unregistered person other than a person

exempted from registration by a notification issued under this Act to make such supply;
(ii) allows an inter-State supply of goods or services or both through it by a person who is not eligible to
make such inter-State supply; or
(iii) fails to furnish the correct details in the statement to be furnished u/s 52(4) of any outward supply
of goods effected through it by a person exempted from obtaining registration under this Act, shall

be liable to pay a penalty of
Ü ₹10,000, or
Ü an amount equivalent to the amount of tax involved had such supply been made by a registered

person other than a person paying tax u/s 10,
whichever is higher.
Ü As per section 122(2), If a RP supplying goods &/or services on which tax has not been paid or short
paid it or tax is erroneously refunded, or ITC has been wrongly availed or utilized,

Cases Quantum of penalty
a. for any reason other than reason of fraud or any wilful It shall be HIGHER of:-

misstatement or suppression of facts to evade tax - ₹ 10,000/- or
- 10% of tax due from such person.

b. for reason of fraud, or any wilful misstatement or It shall be HIGHER of:-
suppression of facts to evade tax, - ₹ 10,000/- or
- tax due from such person.

CCP 21.01.02.01

M/s. Root & Co. filed a refund application under section 54 of the CGST Act, 2017 in respect of
export made by them. While declaring the export turnover, their accountant included the exempt
turnover also as part of export turnover and claimed excess refund. Amount of refund excess

claimed was ₹ 18,000 each under CGST and SGST.

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