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

Sunrise Traders Pvt Ltd, Pune, has applied to the Commissioner for compounding of an offence under the CGST Act. The company has not yet been prosecuted. Which statement about the application is correct as per the CGST Rules, 2017 and Section 138?

Compounding application is made to the Commissioner in FORM GST CPD-01, and it may be filed either before or after prosecution is instituted. It is not restricted to the post-prosecution stage, and a person already convicted by a court cannot compound the offence.

  1. AThe application can be made only after prosecution is instituted
  2. BThe application can be made in FORM GST CPD-01 either before or after prosecution is institutedCorrect
  3. CThe application must be made to the jurisdictional Magistrate in FORM GST CPD-02
  4. DThe application can be made only after the person has been convicted by a court

Explanation

Rule 162(1) allows an applicant to make an application in FORM GST CPD-01 to the Commissioner either before or after the institution of prosecution. Section 138(1) also allows compounding before or after prosecution. Conviction by a court actually bars compounding under the provisos to Section 138(1), so the last option is wrong.

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