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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Compliance Rating, Anti-Profiteering, GST Practitioners and Authorised Representative

Aarav Foods Ltd. was found by the anti-profiteering Authority to have profiteered Rs 5,00,000 by not passing on a rate reduction. The order was passed on 1 March. What is the penalty payable if Aarav Foods deposits the profiteered amount on 20 March of the same year, and what is it if it deposits on 10 April?

No penalty applies for a deposit on 20 March, as it is within thirty days of the order. A deposit on 10 April is beyond thirty days, so a penalty of ten per cent of Rs 5,00,000, namely Rs 50,000, is payable.

  1. ARs 50,000 in both cases
  2. BNil on 20 March; Rs 50,000 on 10 AprilCorrect
  3. CNil in both cases
  4. DRs 50,000 on 20 March; Nil on 10 April

Explanation

Penalty is 10% of the profiteered amount, i.e. Rs 50,000. The proviso exempts the penalty if the amount is deposited within thirty days of the date of the order. 20 March is 19 days after 1 March, so no penalty. 10 April is 40 days after, so the Rs 50,000 penalty applies.

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