Decriminalisation of offences under GST

Subject: Economy

Context:

As per the conclusion of the 48th GST Council meeting, the GST Council chaired by Finance Minister recommended decriminalising certain offences under Section 132 of the Central Goods and Services Tax (CGST) Act, 2017.
Need to decriminalise offences: The GST law is still developing and is in its infancy. As a result, it is critical to recognise that applying penal measures in an unclear ecosystem influences the ability of firms to conduct business.

Key Highlights of the meeting

The 48th GST Council meeting has recommended measures such as –

Raising the minimum threshold of tax amount for launching prosecution under GST from one to two crore.
Reducing the compounding amount from the present range of 50 to 150% of the tax amount to the range of 25 to 100%.
Decriminalising certain offences under Section 132 of the CGST Act, 2017, such as preventing any officer from doing his duties, deliberate tempering of material evidence and failure to supply information.
Other recommendations include refunding unregistered persons and facilitating e-commerce for micro enterprises.

Criminalization of offences under GST act

The GST law establishes stringent penalties and guidelines that taxpayers must abide by in order to ensure smooth intrastate or interstate trade of goods and combat corruption and maintain an effective tax collection system.
The GST Law provides for two different types of penalties.
They may be both concurrent and simultaneous.
The department authorities have the authority to impose monetary fines and the seizure of goods as penalties for violating statutory provisions.
Criminal penalties include imprisonment and fines, which are also provided by GST Law but which can only be awarded in a criminal court following a prosecution.
Sections 122 to 131 of the CGST Act of 2017 contain provisions relating to penalties, while Sections 132 to 138 contain provisions relating to prosecution and compounding.

GST Council:

Article 279A of the Indian Constitution gives power to the President of India to constitute a joint forum of the Centre and States called the GST Council, consisting of –
Union Finance Minister – Chairperson
The Union Minister of State, in-charge of Revenue of finance – Member
The Minister in-charge of finance or taxation or any other Minister nominated by each State Government – Members
The GST Council is an apex committee to modify, reconcile or to make recommendations to the Union and the States on GST, like the goods and services that may be subjected or exempted from GST, model GST laws, etc.
Decisions in the GST Council are taken by a majority of not less than three-fourth of weighted votes cast.
Centre has one-third weightage of the total votes cast and all the states taken together have two-third of weightage of the total votes cast.
All decisions taken by the GST Council have been arrived at through consensus.

To read further on criminal offences under GST Act, refer –