• Notification Date: 23-11-2022
• Notification No: N/A

Govt to remove Penal Offences falling under IPC from GST Law

The government is about to remove the penal offences which are already covered under the Indian Penal Code (IPC) from the GST Act. According to the statement of an officer, this would make it more taxpayer-friendly. This proposal is expected to be taken up in the next meeting of the GST Council. 

If the proposal is approved by the GST Council, then the Finance Ministry will propose amendments to the GST law. The final decision could be taken up in the upcoming winter session of Parliament next month. 

According to the report, the law committee has finalised the changes in Section 132 of the GST Act as part of the exercise to decriminalise the law. As per the new amendment, offences that are similar to those covered under the Indian Penal Code would be removed from GST law. After the GST Council approves of the amendments, it would go to Parliament for effecting changes in the GST Act. The State will have to amend their state GST laws thereafter.  

As the tax experts say, fake billing offences could be part of the new decriminalisation exercise of the GST law. It might also include supplies of goods or services or both without proper invoices. Decriminalisation can also be brought in the issuance of invoices or bills without a supply of goods. Availing input tax credits using fake invoices could be covered under the offences in the IPC. 

According to the statement of AMRG & Associates Senior Partner Rajat Mohan, offences related to issuing and accepting fake invoices could be moved to the Indian Penal Code. 

(AMRG & Associates Senior Partner Rajat Mohan said it is anticipated  

that offences around issuing and accepting fake invoices could be moved to the Indian Penal Code. He said, under section 420 of IPC for cheating cases the maximum sentence period is 7 years. While, the same offence leads to 5 years imprisonment in the GST code, irrespective of the tax evaded. Mohan said this decision would have a great impact on the GST law.