CGST Section 123 — Penalty for failure to furnish information return
CGST Act · Penalty for failure to furnish information return
Quick Answer
Section 123 of the CGST Act, 2017 governs Penalty for failure to furnish information return. It provides the core statutory basis, outlining the essential legal principles, rights, and liabilities under Indian indirect tax law. Section 123 GST: Penalty for failure to furnish information return — eligibility, conditions, case laws and compliance impact under Indian tax law.
Plain-English Explanation
Overview
Section 123 of the CGST Act, 2017, deals with the penalty levied for failing to furnish an information return as required under Section 150. This section ensures compliance with the obligation to provide necessary information to the tax authorities, contributing to effective tax administration and preventing tax evasion. Failure to comply can trigger daily penalties.
Who Does This Apply To?
This section applies to any person who is required to furnish an information return under the provisions of Section 150 of the CGST Act, 2017. This "person" isn't specifically defined within Section 123 itself but is determined by Section 150 which generally refers to individuals, companies, or other entities mandated by the GST authorities to provide specific information related to transactions, dealings, or ownership. These persons might be banks, financial institutions, or any entity that possesses information relevant to GST compliance.
How It Works
The penalty mechanism under Section 123 functions as follows:
- Requirement to Furnish Information Return: Under Section 150, the proper officer issues a notice specifying the information required and the deadline for submitting the information return.
- Failure to Comply: If the designated person fails to furnish the information return within the specified period outlined in the notice issued under Section 150(3), a penalty is triggered.
- Daily Penalty: The proper officer can direct that the defaulting person shall pay a penalty of ₹100 per day for each day the failure continues.
- Maximum Penalty: There's a cap on the total penalty that can be imposed. The penalty levied under this section cannot exceed ₹5,000.
Important Conditions & Exceptions
- Condition 1: The penalty is only applicable if a notice under Section 150(3) has been issued, specifying the information required and the deadline for its submission.
- Condition 2: The penalty is calculated on a per-day basis, offering a clear and quantifiable measure of non-compliance.
- Exception: While the section outlines the penalty for non-compliance, it's imperative that the initial requirement to furnish information stems from Section 150. Without a valid notice under that section, Section 123 is not applicable.
Practical Example
XYZ Bank receives a notice from the GST authorities under Section 150(3), requiring them to furnish details of all GSTIN-linked transactions exceeding ₹1 lakh made through their platform during the previous quarter, with a deadline of 30 days from the date of the notice. XYZ Bank fails to furnish the information within the given timeframe. After 15 days of non-compliance, the proper officer initiates proceedings under Section 123. XYZ Bank is liable to pay a penalty of ₹100 per day for the period of default. Therefore, the penalty after 15 days will be ₹1,500 (15 days * ₹100/day). If the default continues for 50 days, even though the calculation would result in ₹5,000 (50 days * ₹100/day), the maximum penalty that can be levied is capped at ₹5,000.
Key Amendments
No major amendments since enactment.
No case laws found for this section yet.
Browse all case laws →Frequently Asked Questions
What is the penalty under Section 123 of the CGST Act, 2017 for failing to furnish an information return?
Section 123 of the CGST Act prescribes a penalty of ₹100 per day for failing to furnish information returns required under Section 150, after receiving a notice under Section 150(3). This penalty applies for each day the failure continues, up to a maximum of ₹5,000. This penalty is applicable when a person who is required to file information return, fails to do so.
Who is required to furnish information returns under Section 150 of the CGST Act and what happens if they don't?
Section 150 empowers authorities to require specific persons or entities to furnish information relating to goods or services. If a person required to furnish such information under Section 150 fails to comply with a notice issued under sub-section (3) within the specified timeframe, they become liable to a penalty as per Section 123 of the CGST Act.
Is there a maximum limit to the penalty levied under Section 123 for delayed filing of information returns?
Yes, the proviso to Section 123 explicitly states that the maximum penalty that can be imposed for failure to furnish an information return is ₹5,000. This applies regardless of how many days the delay persists.
How is the penalty under Section 123 calculated if I delay submitting an information return?
The penalty is calculated at ₹100 per day of delay, starting from the day after the deadline specified in the notice issued under Section 150(3) until the date the information return is actually furnished. However, the total penalty cannot exceed ₹5,000.
When does Section 123 of the CGST Act get triggered regarding the penalty for failure to furnish information return?
Section 123 is triggered only after the proper officer issues a notice under Section 150(3) requiring a person to furnish information. If the person fails to comply with the notice and provide the information return within the specified period, then the penalty provisions under Section 123 become applicable.
What is an 'information return' as referred to in Section 123 of the CGST Act?
An 'information return,' in the context of Section 123, refers to the specific details of transactions or activities related to goods or services that the tax authorities require under Section 150 of the CGST Act. These returns are filed by specific individuals or entities as demanded by the tax authorities.
Are there any recent changes or amendments to Section 123 of the CGST Act?
As of my last update, there have been no major amendments to Section 123 of the CGST Act, 2017. Taxpayers should always refer to the most recent official notifications and circulars issued by the CBIC to ensure compliance with the latest provisions.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Requirement to Furnish Information Return | This section applies to persons required to furnish an information return under Section 150 of the CGST Act, 2017. |
| Failure to Furnish Within Specified Period | The penalty is triggered when the person fails to furnish the information return within the period specified in the notice issued under Section 150(3). |
| Authority to Impose Penalty | The proper officer has the authority to direct the penalty for non-compliance. |
| Daily Penalty for Non-Compliance | A penalty of one hundred rupees is levied for each day the failure to furnish the return continues. |
| Maximum Penalty Amount | The maximum penalty that can be imposed under this section is limited to five thousand rupees. |
No related notifications found for this section.
Browse all notifications →Amendment History
No numbered amendments recorded for this section.