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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Inspection, Search, Seizure, Offences and Penalties

Under the Integrated Goods and Services Tax Act, 2017, where a penalty is leviable under both the Central GST Act and the State GST (or Union Territory GST) Act for the same contravention, what is the penalty leviable under the IGST Act?

The penalty under the IGST Act is the sum total of the penalties leviable under the CGST Act and the SGST or UTGST Act. The IGST Act provides this expressly, so it is neither the higher of the two, nor an average, nor only the CGST penalty.

  1. AOnly the higher of the two penalties
  2. BThe sum total of the penalties under the CGST Act and the SGST/UTGST ActCorrect
  3. CThe average of the two penalties
  4. DOnly the penalty under the CGST Act

Explanation

Section 20 of the IGST Act, through one of its provisos, states that where penalty is leviable under the CGST Act and the SGST or UTGST Act, the penalty leviable under the IGST Act is the sum total of those penalties. The higher-of or average approaches have no basis in the text.

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