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

Meera Exports was allowed to compound an offence under clause (a) of Section 132(1), punishable under clause (ii) of Section 132(1), with tax evaded of Rs 25,00,000. What is the maximum compounding amount the Commissioner can fix under the Rule 162 table?

For a clause (a) offence punishable under clause (ii) of Section 132(1), the compounding amount is up to 60% of tax evaded, with a minimum of 40%. On Rs 25,00,000 the maximum is Rs 15,00,000.

  1. ARs 6,25,000
  2. BRs 10,00,000
  3. CRs 15,00,000Correct
  4. DRs 18,75,000

Explanation

For clause (a) offences punishable under clause (ii), the table allows up to 60% of the tax evaded, with a minimum of 40%. Maximum is 60% of Rs 25,00,000 = Rs 15,00,000. Rs 10,00,000 is the minimum, while Rs 18,75,000 applies the 75% limit meant for clause (i) offences.

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