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CA Final · Indirect Tax Laws · Offences and Penalties and Ethical Aspects under GST

Gupta Steels Ltd received the Commissioner's order in FORM GST CPD-02 allowing compounding of its offence on 10 March. It had paid the tax, interest and penalty earlier. It did not pay the compounding amount until 20 May. What is the position under the CGST Rules, 2017?

The order becomes vitiated and void. The applicant must pay the compounding amount within thirty days of receiving the order, and failure to do so voids it. The ninety-day period applies to the Commissioner's decision on the application, not to payment.

  1. AThe order remains valid, with interest on the delay
  2. BThe order is vitiated and void because payment was not made within thirty days of receipt of the orderCorrect
  3. CThe order is valid because payment is allowed within ninety days
  4. DThe Commissioner must extend the time automatically

Explanation

Rule 162(6) requires payment of the compounding amount within thirty days of receipt of the order. Under rule 162(7), failure makes the order vitiated and void. The ninety days relates to the Commissioner's time to decide the application, not the applicant's payment time. 10 March to 20 May exceeds thirty days.

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