CGST Section 124 — Fine for failure to furnish statistics

Overview

Section 124 of the CGST Act, 2017, imposes a fine on individuals or entities who fail to furnish required statistical information or returns under Section 151 or provide false information wilfully. This section ensures compliance with data collection for effective GST administration and policy making.

Who Does This Apply To?

This section applies to any person legally obligated to furnish information or returns as per the directives issued under Section 151 of the CGST Act, 2017. This includes registered taxpayers, businesses, government departments, or any other entity specifically requested by a GST officer to provide statistical data related to goods, services, or GST compliance.

How It Works

This section outlines the penalties for non-compliance in furnishing statistical information. The mechanism involves the following steps:

• Trigger: Section 151 empowers GST officers to require individuals or entities to furnish information or returns related to GST. A notice is usually issued specifying the information required, the format, and the deadline.
• Non-Compliance: If the person fails to furnish the required information without reasonable cause or wilfully provides false information, Section 124 is invoked. The "reasonable cause" defense allows for genuine errors or unavoidable circumstances preventing compliance.
• Penalty:
  • Initial Fine: A fine which may extend to ₹10,000 can be levied for the failure to furnish information or for furnishing false information.
  • Continuing Offence: If the failure continues beyond the initial due date, a further fine may extend to ₹100 for each day after the first day the offence continues.
  • Maximum Limit: The maximum fine for a continuing offence is capped at ₹25,000. This limits the penalty, even if the non-compliance persists for a prolonged period.
• Adjudication: The proper officer will typically issue a show cause notice, providing the opportunity to explain the non-compliance. After considering the explanation, the officer will determine if a penalty is warranted and the amount of the fine.

Important Conditions & Exceptions

• Condition 1: The fine applies only if the information is required under Section 151. Failure to furnish information requested under other sections of the CGST Act would attract different penalties.
• Condition 2: A 'reasonable cause' for failure to furnish information can mitigate the penalty. Examples of reasonable cause might include genuine technical difficulties, a natural disaster, or serious illness. The burden of proof to establish the reasonableness of the cause usually rests with the assessee.
• Exception: If the failure to furnish information is due to a genuine error or a bonafide mistake (not wilful), and the assessee rectifies it promptly upon discovery, the penalty might be waived or reduced at the discretion of the tax officer.

Practical Example

ABC Traders, a registered supplier of electronic goods, receives a notice under Section 151 from the GST department requesting detailed sales data for a specific period, with a deadline of October 31st. ABC Traders, due to an oversight in their accounting department, fails to submit the data by the deadline. They submit it on November 15th. The GST officer, after examining the circumstances, determines that the delay was not due to reasonable cause.

In this case, ABC Traders would be liable for a fine. The initial fine could be up to ₹10,000. Since it was a continuing offence (delayed by 15 days), an additional fine of ₹100 per day, totaling ₹1,500 (15 days * ₹100), could be added. The total fine would be ₹10,000 + ₹1,500 = ₹11,500. However, the officer cannot impose more than ₹25,000 in total, even if the offense were to last longer.

Key Amendments

No major amendments since enactment.