Any Tax Defaulter can be Arrested under GST Law!

Any Tax Defaulter can be Arrested under GST Law!

Any Tax Defaulter can be Arrested under GST Law!

The Rajya Sabha has passed four important GST Bills in the year 2017, namely the Goods and Services Tax Bill 2017, Union Territory Service Tax Bill 2017, Integrated Goods and Services tax Bill 2017 and the Central GST Bill 2017. This article gives a picture of some of the consequences of evading tax and offences which are categorized as cognizable and non-cognizable offence.

If the GST commissioner considers that a person has committed an offence u/s 132, they are subject to arrest by any official CGST/SGST officer. The arrested person shall be intimated on the grounds or basis of his arrest. He/ She must appear before the judge within 24 hours for cognizable violation.

Some Key Terms:

  • Cognizable offence

Cognizable offences are incidents where police can arrest without a warrantand can investigate an individual person without an approval from the court. Cognizable offence involves serious crimes such as murder and counterfeiting.

  • Non-Cognizable offence

Non-cognizable offences are incidents where a police officer cannot arrestor carry an investigation on an individual without prior permission from court.

  • Bail implies granting a release to a person who is convicted of anoffence. To release the person on the terms of security that theyshall be produced when required.

  • Bailable offences are the offences where they are entitled as bailable under any law where a bail can be issued or granted.

  • Non-Bailable offences are acts where the convicted cannot be granted a bail or released; a bail can be granted only at the discretion of the Court.

Some of the Cognizable & Non-Bailable offences under GST, which aresubject to immediate arrest include the following

Under the Sub section 5 of Section 132 of CGST 2017 bill, mentioned beloware some of the acts which fall under the category of cognizable andnon-bailable acts under CGST/ SGST/ UTGST/ IGST / GST. When a person tries
to evade tax or provides incorrect details or issues a wrong invoice, theycan be subjected to both imprisonment and heavy penalty.

  • Supplying of goods and/or services without issuing any bill orinvoice, to violate the GST laws to avoid paying tax

  • Issuing invoice/bill without supplying service and/or goods andmisusing the utilization of tax credit or refund of tax

  • Collecting the tax but failing to deposit and file it within 3months

  • If he has been convicted for an offence and this being his second offence

All other offences, apart from the list above, fall under non-cognizable offences and are bailable. It came as a surprise after the 2 Mumbai based businessmen arrest, the alleged offence committed by one is above 5 Crore which is not bailable and the other is below 5 crore which is bailable. Regulations and implication of Rules are brought to strict observations by GST Council for Tax Defaulters.

Industry expert’s advice businessmen not to involve in fraudulent practices especially when “the power of arrest is excised by GST Officers.”