General disciplines related to penalty, According to the provisions of section 126 of CGST Act 2017 regarding general disciplines related to penalty
The above said section explains the principles for levy of penalty and general disciplines are to be observed by the tax authorities while levying penalty. The general guidelines to be followed while imposing penalties are as under:
Substantial penalties shall not be imposed for minor breaches of tax regulations or procedural requirements.
No penalty in respect of any omission or mistake in documentation which is easily rectifiable and obviously
made without fraudulent intent or gross negligence shall be greater than necessary to serve merely as a
warning.
The penalty imposed shall depend on the facts and circumstances of the case and shall commensurate with the
degree and severity of the breach.
(1) No officer under this Act shall impose any penalty for minor breaches of tax regulations or procedural requirements and in particular, any omission or mistake in documentation which is easily rectifiable and made without fraudulent intent or gross negligence.
Explanation.––For the purpose of this sub-section,––
(a) a breach shall be considered a ‘minor breach’ if the amount of tax involved is less than five thousand rupees;
(b) an omission or mistake in documentation shall be considered to be easily rectifiable if the same is an error apparent on the face of record.
(2) The penalty imposed under this Act shall depend on the facts and circumstances of each case and shall be commensurate with the degree and severity of the breach.
(3) No penalty shall be imposed on any person without giving him an opportunity of being heard.
(4) The officer under this Act shall while imposing penalty in an order for a breach of any law, regulation or procedural requirement, specify the nature of the breach and the applicable law, regulation or procedure under which the amount of penalty for the breach has been specified.
(5) When a person voluntarily discloses to an officer under this Act the circumstances of a breach of the tax law, regulation or procedural requirement prior to the discovery of the breach by the officer under this Act, the proper officer may consider this fact as a mitigating factor when quantifying a penalty for that person.
(6) The provisions of this section shall not apply in such cases where the penalty specified under this Act is either a fixed sum or expressed as a fixed percentage.