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

Under the anti-profiteering provision of the CGST Act, 2017, the penalty on a registered person found to have profiteered is equal to what percentage of the profiteered amount, and when is no penalty leviable?

The penalty is ten per cent of the profiteered amount. It is not leviable if the profiteered amount is deposited within thirty days of the date on which the Authority passes its order, as the proviso to section 171(3A) provides.

  1. A10% of the profiteered amount; none if the amount is deposited within 30 days of the Authority's orderCorrect
  2. B10% of the profiteered amount; none if the amount is deposited within 60 days of the Authority's order
  3. C100% of the profiteered amount; none if deposited within 30 days of the order
  4. D25% of the profiteered amount; none if deposited within 30 days of the notice

Explanation

Section 171(3A) provides a penalty equal to ten per cent of the profiteered amount. Under the proviso, no penalty applies if the profiteered amount is deposited within thirty days of the date of the Authority's order. The 60-day option misstates the period.

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