GST PENALTY U/S 129

Case Scenario for Penalty Levied Under Section 129 of Indian GST Laws:

1) When Goods are chargeable to Tax: Mr. Raja has send goods cost Rs. 1,00,000 and Tax is @18% i.e. Rs. 18,000. Vehicle is detained and goods are confiscated. 1.1) Penalty when Owner comes forward 1.2) Penalty when Owner does not comes forward.

2) When Goods are Exempt from Tax. Mr. Raja has send goods cost Rs. 1,00,000 and Tax is @0% i.e. Rs. 0 as goods are exempt. Vehicle is detained and goods are confiscated. 2.1) Penalty when Owner comes forward 2.2) Penalty when Owner does not comes forward.

1. When Goods are chargeable to Tax: Mr. Raja sends goods worth Rs. 1,00,000 with a tax of 18%, i.e., Rs. 18,000. The vehicle is detained and goods are confiscated.

A) Law wef 1-Jul-2017 to 31-Dec-2021: 1.1) Penalty when Owner comes forward: Applicable tax: Rs. 18,000 Penalty: 100% of tax payable, i.e., Rs. 18,000 Total amount payable: Rs. 18,000 (tax) + Rs. 18,000 (penalty) = Rs. 36,000

1.2) Penalty when Owner does not come forward: Applicable tax: Rs. 18,000 Penalty: 50% of the value of goods reduced by tax amount paid thereon, i.e., (50% of Rs. 1,00,000) - Rs. 18,000 = Rs. 32,000 Total amount payable: Rs. 18,000 (tax) + Rs. 32,000 (penalty) = Rs. 50,000

B) Law wef 01-Jan-2022: 1.1) Penalty when Owner comes forward: Penalty: 200% of tax payable, i.e., Rs. 18,000 x 2 = Rs. 36,000 Total amount payable: Rs. 36,000 (penalty)

1.2) Penalty when Owner does not come forward: Penalty: 50% of the value of goods or 200% of tax payable, whichever is higher: max(50% x Rs. 1,00,000, 200% x Rs. 18,000) = max(Rs. 50,000, Rs. 36,000) = Rs. 50,000 Total amount payable: Rs. 50,000 (penalty)

2. When Goods are Exempt from Tax: Mr. Raja Ram sends goods worth Rs. 1,00,000 with a tax of 0%, i.e., Rs. 0 as goods are exempt. The vehicle is detained and goods are confiscated.

A) Law wef 1-Jul-2017 to 31-Dec-2021: 2.1)

Penalty when Owner comes forward: Penalty: 2% of the value of goods or Rs. 25,000, whichever is less:

min(2% x Rs. 1,00,000, Rs. 25,000) =

min(Rs. 2,000, Rs. 25,000) = Rs. 2,000

Total amount payable: Rs. 2,000 (penalty)

2.2) Penalty when Owner does not come forward: Penalty:

5% of the value of goods or Rs. 25,000, whichever is less:

min(5% x Rs. 1,00,000, Rs. 25,000) =

min(Rs. 5,000, Rs. 25,000) =

Rs. 5,000 Total amount payable: Rs. 5,000 (penalty)

B) Law wef 01-Jan-2022:

2.1) Penalty when Owner comes forward: Penalty:

2% of the value of goods or Rs. 25,000, whichever is less: min(2% x Rs. 1,00,000, Rs. 25,000) =

min(Rs. 2,000, Rs. 25,000) = Rs. 2,000

Total amount payable: Rs. 2,000 (penalty)

2.2) Penalty when the Owner does not come forward:

Penalty: 5% of the value of goods or Rs. 25,000, whichever is less:

min(5% x Rs. 1,00,000, Rs. 25,000) = min(Rs. 5,000, Rs. 25,000) = Rs. 5,000

Total amount payable: Rs. 5,000 (penalty)