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Here’s What Businesses Should Not do to Avoid Penalties Under GST
June 28, 2017
On July 1, 2017, the Indian economy will receive its biggest taxation reform, i.e. Goods and Services Tax. The government is keen on making it a success, and to ensure that the benefits are passed to the end consumers and not just the traders, several stringent laws are set in place to maintain order and fair practice.
Anyone found guilty of tax evasion or frauds of some other kind under GST may have to pay a fine up to several lakhs and/or do jail term up to 5 years.
The following are some of the things businesses must check to avoid legal action:
- A person involved in tampering with invoices or other documents that are used in GST system can be jailed.
- People found to be violating any rules pertaining to GST taxation can be penalized with up to 5 years’ jail term.
- Tax evasion is a serious offense under GST. If a person is found guilty of evading taxes above Rs. 5 crores then it’ll be considered as a non-bailable offense and give the police the authority to arrest the person without a warrant.
- Using input tax credits unfairly such as by avoiding actual receipts or underreporting sales will be considered as a form of tax evasion and dealt with accordingly.
- Submission of false returns, invoices, financial records, etc. will also be considered as a serious offense under GST.
Although the government may make some further changes before the GST rollout, the ones mentioned above are likely to stay in essence.