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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Procedural Compliance under GST

Which of the following is a feature of the general disciplines related to penalty in section 126 of the CGST Act, 2017?

Voluntary disclosure of a breach to the officer before the officer discovers it may be considered by the proper officer as a mitigating factor when quantifying the penalty. A hearing is still required and the order must specify the breach.

  1. AA penalty may be imposed without hearing if the person has a low compliance rating
  2. BVoluntary disclosure before discovery by the officer may be considered as a mitigating factor by the proper officerCorrect
  3. CSection 126 applies fully even where the penalty is a fixed sum or a fixed percentage
  4. DPenalty need not specify the nature of the breach in the order

Explanation

Section 126(5) allows the proper officer to treat voluntary disclosure, made before the officer discovers the breach, as a mitigating factor. Hearing is mandatory under 126(3), the section does not apply to fixed sum or fixed percentage penalties under 126(6), and the order must specify the breach under 126(4).

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