11 July 2024
Under Section 129 of the Central Goods and Services Tax (CGST) Act, 2017, penalties and tax liabilities for violations related to the transportation of goods are structured as follows:
1. **Detention, Seizure, and Release of Goods**: When goods are being transported without proper documents or in contravention of the GST law, they can be detained or seized by the proper officer of GST. The detained goods can be released upon payment of applicable tax and penalty.
2. **Penalties under Section 129**: - If the proper officer detains goods and is satisfied that a violation has occurred, the penalty can be up to 100% of the tax payable on such goods or INR 10,000, whichever is higher.
3. **Calculation Example**: - If the tax payable on the goods is INR 50,000, the penalty can be up to INR 50,000 (100% of the tax) or INR 10,000, whichever is higher. In this case, the penalty would be INR 50,000.
4. **Additional Considerations**: - Apart from the penalty, the goods may also be liable for the tax amount that was evaded or for which the proper documents were not maintained.
5. **Discretion of the Proper Officer**: - The exact amount of penalty and tax liability under Section 129 is determined by the proper officer based on the specific circumstances of the case. Factors such as the nature of the violation, intent, and cooperation of the parties involved may influence the final decision.
6. **Legal Remedies**: - If you believe the penalty or tax determination is unjustified, you have the right to appeal the decision to the appropriate appellate authority under GST law.
To ensure compliance and mitigate risks associated with penalties under Section 129, it's crucial to maintain proper documentation, adhere to GST regulations regarding the transportation of goods, and promptly address any issues raised by GST authorities during transit.
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