CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Compliance Rating, Anti-Profiteering, GST Practitioners and Authorised Representative
The Authority examining profiteering under Section 171 finds that a registered person profiteered ₹4,00,000. He deposits the profiteered amount 20 days after the date of the Authority's order. What penalty is leviable?
No penalty is leviable. The normal penalty is ten per cent of the profiteered amount, which would be ₹40,000, but the proviso waives it where the profiteered amount is deposited within thirty days of the Authority's order, and twenty days is within that window.
- A₹40,000, being ten per cent of the profiteered amount
- B₹4,00,000, being the full profiteered amount
- CNil, since the deposit was made within thirty days of the orderCorrect
- D₹20,000, being five per cent of the profiteered amount
Explanation
Section 171(3A) provides a penalty of ten per cent of the profiteered amount, i.e. ₹40,000. However, the proviso says no penalty is leviable if the profiteered amount is deposited within thirty days of the order. Deposit after 20 days qualifies, so penalty is nil. The ₹40,000 option ignores the proviso.
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