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

Under the anti-profiteering provisions of the CGST Act, 2017, a registered person is held by the Authority to have profiteered Rs 2,00,000 and is liable to a penalty. What penalty applies if the profiteered amount is NOT deposited within thirty days of the date of the Authority's order?

The penalty is Rs 20,000. Section 171(3A) levies a penalty of ten per cent of the profiteered amount, and the waiver applies only if the amount is deposited within thirty days of the Authority's order. Since no deposit was made in time, the penalty is payable.

  1. ARs 10,000
  2. BRs 20,000Correct
  3. CRs 40,000
  4. DNo penalty, as the Act only requires the profiteered amount to be refunded

Explanation

Section 171(3A) imposes a penalty equal to ten per cent of the amount profiteered. 10% of Rs 2,00,000 is Rs 20,000. The penalty is waived only if the profiteered amount is deposited within thirty days of the order, which did not happen here. Rs 10,000 wrongly uses 5%, and the option claiming no penalty ignores the sub-section.

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