Page 6 - Chap21 Offences & Penalties

Determine the total amount of penalty (CGST + SGST) leviable under GST law in respect of such
erroneous refund if:

(i) such excess refund claim was proved to be inadvertent and not wilful/fraud.
(ii) such excess refund was on account of wilful misstatement/ fraud. [CA Final Nov 23 Exam]
Answer : As per Sec 122(2) of CGST Act, Amount of penalty (each under CGST and SGST) in respect of the
erroneous refund claimed by M/s Root & Co.:

(i) Where the excess refund claim was proved to be inadvertent and not wilful/fraud:
Ü Penalty payable will be higher of the following:
- 10% of tax due, i.e. ₹ 1,800 (18,000 x 10%)
- ₹ 10,000

Ü Thus, Penalty will be ₹ 10,000 each under CGST and SGST.
(ii) Where the excess refund claim was on account of wilful misstatement/fraud:
Ü Penalty payable will be higher of the following:
- Tax due, i.e. ₹ 18,000
- ₹ 10,000

Ü Thus, Penalty will be ₹ 18,000 each under CGST and SGST.

CCP 21.01.03.00

Is there any penalty prescribed for a person other than the taxable person under Section 122?
Answer : Yes, as per section 122(3) of CGST Act, a penalty extending to ₹ 25,000 shall be levied on any
person who:

Ü Aids or abets any of the 21 offences specified in section 122(1),
Ü Deals with goods that are liable to confiscation in any way by transporting, removing, depositing,
keeping, concealing, supplying or purchasing or in any other manner.
Ü Receives or deals with supply of services in contravention of the Act,

Ü Fails to appear before an authority who has issued a summon,
Ü Fails to issue any invoice for a supply or account for any invoice in his books of accounts.

CCP 21.01.04.00

Answer the following questions:-
(a) Nirmal Private Limited, registered in Vasai, Maharashtra, is engaged in supply of taxable goods
and services. In the month of April, it sold goods worth ` 5,00,000 (excluding GST) to
Suraksha Enterprises and collected tax @ 28% on said goods from the buyer. However, the

actual rate of tax appliable in the given case was 18%.
Nirmal Private Limited deposited the tax @ 18% on these goods to the Government on
the due date and retained the remaining tax collected. Determine the amount of penalty, if any,
that may be imposed on Nirmal Private Limited in the month of October in the given case
ignoring interest payable, if any. [CA Final RTP Nov 21]
(b) Bindusar, Chief Executive Officer of Ashoka Solutions Ltd., is issued a summon to appear

before the central tax officer to produce the books of accounts of Ashoka Solutions Ltd. in an
inquiry conducted on said company. Determine the amount of penalty, if any, that may be
imposed on Bindusar, if he fails to appear before the central tax officer. [CA Final RTP Nov 21]

[CA Final RTP May 18- Similar Question] [Study Mat]

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