Arrest under GST

If the commissioner of CGST/SGST considers an individual has committed a specific offense, then he could be arrested under GST by any authorized CGST/SGST officer. The arrested individual would be informed regarding the reason for his arrest. He would show up before the magistrate in 24 hours for a cognizable offense.

Cognizable offenses are those where the police could arrest an individual without any arrest. They are severe wrongdoings like murder, robbery, counterfeiting. A court can't take cognizance of any offense liable to be punished without the earlier consent of the assigned specialist. Only a Magistrate of the First Class (and above) could try such an offense.

The offenses under section 132 of the CGST Act, 2017, where arrest provisions become applicable are.

• A taxable individual supplies any goods or services with no invoice or issues a false invoice.

• A taxable individual issues any invoice or bill without supply of good or services in breach the provisions of GST.

• A taxable individual collects any GST however does not submit it to the government in 3 months.

• Even in the event that he gathers any GST in breach of provisions, a taxable individual still needs to deposit it to the government in 3 months. Failure to perform as such would be an offense as per GST.

• A taxable individual has already been convicted for a previous u/s 132 i.e., this is his second offense.

Click here to read more about the "Recent Change In GST Amendment"

In considering the section 132 with arrest provisions, it basically stands that an individual could be arrested only where the tax evasion is in excess of 100 lakhs rupees or where an individual has prior been convicted for an offense u/s 132.

Penalties

• The penalties for tax amount involved 100-200 lakhs, is jail term up to 1 year.

• The penalties for tax amount involved 200-500 lakhs, is jail term up to 3 years.

• The penalties for tax amount involved above 500 lakhs, is jail term up to 5 years.

• Fine is applicable for all the three cases.

The Commissioner has the ability to arrest based on his reasons. However, the GST law must have greater clarity on the events when an individual could be arrested taking into account that it is new law and there would undoubtedly be genuine mistakes.

Author:

eStartIndia Team