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CMA Final · Indirect Tax Laws and Practice · Anti-profiteering

Under the anti-profiteering provision of the CGST Act, 2017, a registered person is held by the Authority to have profiteered Rs 2,00,000. The order is passed on 10 March. By which course of action would the person avoid the penalty under the Act?

Penalty is avoided by depositing the profiteered amount within thirty days of the date of the Authority's order. The law waives the ten per cent penalty only on that condition. A longer period, a deposit of the penalty alone, or a reply does not qualify.

  1. ADeposit the profiteered amount within thirty days of the date of the orderCorrect
  2. BDeposit the profiteered amount within sixty days of the date of the order
  3. CDeposit the penalty of ten per cent within thirty days of the order
  4. DFile a written reply within thirty days of the order

Explanation

The proviso to the penalty provision says no penalty is leviable if the profiteered amount is deposited within thirty days of the date of the order. Sixty days is not the statutory period. Depositing only the penalty amount does not satisfy the proviso, which requires the profiteered amount itself to be deposited.

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