CMA Final · Indirect Tax Laws and Practice · Anti-profiteering
A manufacturer received an order in which the Authority held that it profiteered Rs 15,00,000. It deposited Rs 15,00,000 on the 45th day after the order. Which statement is correct under section 171(3A) of the CGST Act?
A penalty of Rs 1,50,000 is leviable. Section 171(3A) imposes ten per cent of the profiteered amount, and the proviso waives it only for deposit within thirty days of the order. Deposit on the 45th day is late, so ten per cent of Rs 15,00,000 applies.
- APenalty of Rs 1,50,000 is leviable because deposit was after thirty daysCorrect
- BNo penalty is leviable because the full profiteered amount was deposited
- CPenalty of Rs 75,000 is leviable as deposit was within sixty days
- DPenalty of Rs 15,00,000 is leviable as the deposit was late
Explanation
The exemption in the proviso applies only if the profiteered amount is deposited within thirty days of the date of the order. Deposit on day 45 misses this, so the penalty of ten per cent applies: 10% of Rs 15,00,000 is Rs 1,50,000. Full deposit alone does not remove the penalty, and no sixty-day window exists.
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