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

Under Rule 162 of the CGST Rules, the Commissioner issues an order in FORM GST CPD-02 allowing Sundaram Exports' compounding application and specifying the compounding amount, received on 5 March. Sundaram pays the amount on the 45th day after receipt of the order. What is the consequence?

The compounding order becomes vitiated and void. Rule 162 requires the compounding amount to be paid within thirty days of receiving the order, and failure to do so voids it. The ninety-day period applies to the Commissioner's decision, not to the applicant's payment.

  1. AThe order is valid, as payment can be made within 90 days
  2. BThe order is vitiated and void, as payment was required within 30 days of receipt of the orderCorrect
  3. CThe order stays valid but interest is charged for 15 days
  4. DThe order is valid if the applicant furnishes proof of payment

Explanation

Rule 162(6) requires payment within thirty days from receipt of the order. Under rule 162(7), failure to pay within that time makes the order vitiated and void. The 90 days in the rule is the Commissioner's time for deciding the application, not the payment period.

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