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CS Executive · Tax Laws and Practice · Procedural Compliance under GST

A person voluntarily tells the proper officer about a breach of the tax law before the officer has discovered it. What is the effect under section 126 of the CGST Act, 2017?

The proper officer may treat the voluntary disclosure, made before the officer discovered the breach, as a mitigating factor when quantifying the penalty. Section 126(5) makes this discretionary, so the penalty is not automatically waived.

  1. AThe penalty is automatically waived in full
  2. BThe proper officer may consider the disclosure as a mitigating factor when quantifying the penaltyCorrect
  3. CThe officer must impose the maximum penalty
  4. DThe disclosure has no relevance to the penalty

Explanation

Section 126(5) provides that voluntary disclosure before discovery by the officer may be considered by the proper officer as a mitigating factor in quantifying the penalty. It is discretionary and does not give automatic waiver.

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