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CS Executive · Tax Laws and Practice · Procedural Compliance under GST

Under the general disciplines related to penalty in the CGST Act, 2017, when is a breach treated as a 'minor breach' for which no penalty may be imposed by an officer, provided there is no fraudulent intent or gross negligence?

A breach is a minor breach when the tax involved is less than five thousand rupees. For such breaches, and easily rectifiable documentation errors made without fraudulent intent or gross negligence, no penalty can be imposed under section 126.

  1. AWhen the amount of tax involved is less than five thousand rupeesCorrect
  2. BWhen the amount of tax involved is less than twenty-five thousand rupees
  3. CWhen the amount of tax involved is exactly five thousand rupees or less than ten thousand rupees
  4. DWhen the taxpayer has filed all returns on time in the preceding year

Explanation

The Explanation to section 126(1) says a breach is a minor breach if the tax involved is less than five thousand rupees. Twenty-five thousand rupees is the ceiling of the general penalty under section 125, not the minor breach threshold. Filing history is not a test.

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