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Compounding of offences under GST

As per the provisions of section 138(1), any offence may be compounded by the Commissioner, either before or after the institution of prosecution upon payment of such compounding amount in such manner as may be prescribed.

  • Compounding shall be allowed only after making payment of tax, interest and penalty involved in such offences. Further, any compounding allowed under the provisions of this section shall not affect the proceedings, if any, instituted under any other law.
  • On payment of compounding amount,
    • no further proceedings shall be initiated under Goods and Services Tax against the accused person in respect of the same offence; and
    • any criminal proceedings, if already initiated in respect of the said offence, shall stand abated.
  • Immunity granted to a person may be withdrawn by the commissioner if he is satisfied that such person had, in the course of the compounding proceedings, concealed any material particulars or had given false evidence.

Amount for compounding of offences

The amount for compounding of offences shall be such as may be prescribed, subject to -

  • The minimum limit for compounding amount is to be the higher of the following amounts:

(i) 50% of tax involved, or

(ii) 10,000.

  • The upper limit for compounding amount is to be higher of the following amounts:

(i) 150% of tax involved or

(ii) 30,000

When is the compounding of offences not available under GST?

The following offences under GST shall not be compounded-

(i) Offence specified in clauses (a) to (f) of sub-section (1) of section 132, if the person charged with offence had been allowed to compound earlier in respect of any of the said offences;

(ii) Aiding/abetting offences specified in clauses (a) to (f) of sub- section (1) of section 132, if the person charged with offence had been allowed to compound earlier in respect of any of the said offences;

(iii) Any offence (other than the above offences) under GST law in respect of supplies of value >1 crores, if the person charged with offence had been allowed to compound earlier in respect of any of the said offences;

(iv) a person who has been accused of committing an offence under this Act which is also an offence under any other law for the time being in force;

(v) a person who has been convicted for an offence under CGST Act by a court;

(vi) a person who has been accused of committing an offence specified in clause (g) or clause (j) or clause (k) of sub-section (1) of section 132; and (vii) any other class of persons or offences as may be prescribed:


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TaxGyata Team

TaxGyata Team