Information related to Section 132 of the CGST Acr, 2017, Goods and Services Tax - GST

[Rajesh Kumar]

Sir/ Madam,

1. Section 132 (1)-

…………shall be punishable––

(i) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds five hundred lakh rupees, with imprisonment for a term which may extend to five years and with fine;

I want to know that whether the said part of section 132 covers CGST + SGST / IGST portion for five crores or only CGST portion required for 5 Crores.

2. Further Section 132 (1) (d) says :

(d) collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;

There if taxpayer files GSTR-1 but not filed 3B or short paid through GSTR -3B which results short payment or non payment of more than five crores but payment from the customer is not received in the bank account.

Whether can Department covers this act for arrest under 132(1)(d) even payment not received from the customer but invoices have been issued and GSTR-1 has been filed accordingly.

Regards

Posts / Replies

[Amit Agrawal]

kindly note the "Explanation" to Section 132:

"Explanation.- For the purposes of this section, the term “tax” shall include the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or refund wrongly taken under the provisions of this Act, the State Goods and Services Tax Act, the Integrated Goods and Services Tax Act or the Union Territory Goods and Services Tax Act and cess levied under the Goods and Services Tax (Compensation to States) Act."

[Charu Tyagi]

1. Under the provision of Section 132 of CGST Act, The term 'Tax" shall include SGST, IGST and UTGST and cess levied thereunder.

2. Section 132(1)(d) provides that "collects any amount as tax, but fails to pay the same to the government beyond a period of three months from the date on which such payment becomes due" & Section 132(1)(f) Provides that "falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information with an intention to evade payment of tax due under this Act" also GSTR 3B is to file for payment of liability of tax therefore NON-FILING clearly a violation of law hence punishable under this section of the CGST Act.

[Rajesh Kumar]

Dear sir/madam,

Point No. 1 is cleared by Amit Sir.

My confusion in second points is that Section 132 (1) (d) starts with word “collects”. Does it mean that payment from the recipient is must to be received or only invoice issuance is sufficient for this sub section.

[Charu Tyagi]

As per proviso to Section 16 of CGST Act, one of the condition stipulated for valid transaction that he has to receive the payment for the invoice within 180 days.

[KASTURI SETHI]

Sh.Rajesh Kumar Ji,

Distinction between levy and collection

As per Article 265 of Constitution of India, 'Collection' means physical realization of tax which is levied or imposed. Collection of tax is normally a stage subsequent to the levy of the same....” ------------------- Hon'ble Supreme Court of India in the case of PEEKAY RE-ROLLING MILLS (P) LTD. Versus ASSISTANT COMMISSIONER reported 2007 (3) TMI 356 - SUPREME COURT.

Pl. read the whole judgment word for word. Emphasis is on para nos.43, 44 & 45.

 

[Rajesh Kumar]

Respected sir/madam,

It means if a taxpayer shows turnover in GSTR-1 but less paid through GSTR-3B which results duty less paid amounts to 7 crores, In this scenario, Department can not arrest under Section 132(1)(d) till the said amount get collected by the taxpayer from the suppliers.

If Department wants to arrest, officers require to keep an eye on the bank statements of the taxpayer to track the said payment.

[Amit Agrawal]

If tax-payer has not collected tax (which is sought to be evaded), Dept. cannot use Section 132(1)(d) to arrest the person using Section 69.

But, jurisdictional Commissioner can always use Section 132(1)(e) to prosecute the person (as taxes sought to be evaded is Rs. 7 Crore, as per your last post) and if convicted, sent such tax-payer to jail to serve imprisonment, with fine.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Amit Agrawal]

In last post of mine, please read as follows: But, jurisdictional Commissioner can always use clauses (e) & (f) of Section 132(1) (as per evidences collected & their suitability to Dept's case) to prosecute such person & his accomplice, if any (as taxes sought to be evaded is Rs. 7 Crore, as per your last post) and if convicted, send such tax-payer (& its accomplice) to jail to serve imprisonment, with fine.