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Here is the comprehensive guide on GST and penalties. An offender not paying tax or making short payments must pay a penalty of 10% of the tax amount due subject to a minimum of Rs. 10,000. Consider — in case tax has not been paid or a short payment is made, a minimum penalty of Rs 10,000 has to be paid. The maximum penalty is 10% of the tax unpaid.
The Goods and Services Tax, GST, was launched in the year 2017 which eliminated almost all the forms of indirect taxation. Instead, a uniform tax, called GST, became applicable on all goods and services. Every type of business which is producing goods or services is required to follow the rules and regulations specified in the GST Act. If the business does not abide by the rules prescribed under the GST Act, it would be held responsible for a breach of law for which it would attract penalties.
While, the GST penalty interest rates on the applicable offences are yet to be notified, the GST late payment penalty has been specified as follows:
Like the pre-existing indirect taxes, offences under GST system are divided into two categories:
A. Offences Attracting Fiscal Penalties
B. Offences Attracting Prosecution
If GST fraud is committed by a registered person/entity with the help from another person (whether registered or unregistered), penalty under GST is applicable to all parties considered. Currently this penalty under GST Act has been fixed at Rs. 25,000 irrespective of whether both parties are registered under GST or not. The following are some key actions that constitute as aiding and abetting GST fraud:
Refer GST official site to know more about GST penalties and offences.
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