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

Sharma Traders Pvt Ltd, accused of an offence under the CGST Act, files an application for compounding in FORM GST CPD-01 with the Commissioner. Which statement about the timing of the application is correct as per the CGST Rules, 2017?

An application for compounding in FORM GST CPD-01 may be made to the Commissioner either before or after prosecution is instituted. The Rules do not restrict it to one stage, though a person already convicted by a court cannot compound.

  1. AIt can be made only after prosecution has been instituted
  2. BIt can be made only before prosecution is instituted
  3. CIt can be made either before or after the institution of prosecutionCorrect
  4. DIt can be made only after conviction by a court

Explanation

Rule 162(1) allows an applicant to apply for compounding either before or after the institution of prosecution. Limiting it to before prosecution or to after prosecution is wrong. A person convicted by a court is excluded from compounding under section 138.

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