Govt for decriminalising select offences under GST

New Delhi: The government is working on decriminalisation of certain offences under GST by raising the threshold limit for launching prosecution and also lowering charges for compounding of offence, an official said on Wednesday.

Currently, the law provides for launching prosecution against offenders in cases where the amount of Goods and Services Tax (GST) evasion or misuse of Input Tax Credit (ITC) is more than Rs5 crore. "We are working on making the provision under GST Act for prosecution more simpler and friendly for taxpayers. We have Section 132 under CGST Act which criminalises illegal credit for GST evasion. The threshold level (for launching prosecution) are being reconsidered," finance ministry additional secretary (revenue) Vivek Aggarwal said at an Assocham event here.

Launching of prosecution by taxmen means commencement of legal proceedings against the offender. The compounding charges for offences under GST would also be lowered so that taxpayers are encouraged to compound their offences instead of going into litigation. Under GST Act, the amount payable for compounding of offences shall be 50 per cent of the tax amount involved subject to a minimum Rs10,000. Maximum amount for compounding is 150 per cent of the tax or Rs30,000, whichever is higher.

"The compounding provision in GST are prohibitive. It requires 50 per cent to 150 per cent as compounding fees which is impossible to pay. That's why there is zero compounding for all cases under GST. That is being relooked at so that it becomes affordable and compounding becomes a first or better choice for taxpayer," Aggarwal said.