Provisions of penalty under Maharashtra GST Act, 2017

Source: The Hitavada      Date: 28 Sep 2017 09:55:20


 

Business Bureau,

The Maharashtra Goods and Service Tax Act, 2017 came into effect from July 1, 2017. As per the provisions of this Act, the Goods and Service Tax Indentification Number (GSTIN) has been allotted to the persons who have applied for registration under the Maharashtra GST Act or MGST Act.


The Department of State GST has already issued instructions related to process of registration an issues related to GST migration and new registration. This circular is being issued to appraise the trade with the particulars to be displayed on the Board by a registered person and penalty leviable under the Act for non-compliance of those provisions.


Legal provision: The person registered under the GST Act is expected to follow certain rules with respect to display of GSTIN as prescribed under the law. Rule 18 of the MGST Rules 2017 reads as under: Display of registration certificate and GSTIN on the name board. Every registered person will have to display his certificate of registration in a prominent location at his principal place of business and that every additional place or places of business. Every registered person will have to display his GSTIN on the name board exhibited at the entry of his principal place of business and at every additional place or places of business.
Expected compliance: The above rule clearly says that every registered person will have to display his certificate of registration at his principal place of business and at every additional place or places of business.


It is also required to display his GSTIN on the name board which should be exhibited at the entry of his principal place of business and at every additional place or places of business. The GSTIN should be prominently displayed in bold letters so as to be easily visible to visitors especially to the customers/vendors.


Provisions of Composition Taxable Persons: a) Rule 5 (1) (f) of the MGST rules says that every registered person exercising the option to pay tax u/s 10 of the MGST Act i.e. every registered person opting under the Composition Scheme will mention the words “Composition taxable person not eligible to collect tax on supplies” at the top of the bill of supply issued by him.


b) Also, as per rule 5 (1) (g) of the MGST Rules 2017, he have to mention the words “Composition Taxable Person” on every notice or sign board display at a prominent location at his principal place of business.
Needless to say, the provision laid down in the rule 18 referred to above will also apply to a ‘Composition Taxable Person’ i.e. he also shall be required to display his GSTIN at the entry of his principal place of business and at every additional place or places of business as well as display his certificate of registration at the prominent location at his principal place of business and at every additional place or place of business.


Penalty provision for issuance of incorrect tax invoice and contravention of rule 18 and 5 (1) (f): Attention of the trade is also invited to 1) Section 122 (1) (I) of the MGST Act 2017, which says that any taxable person who issues an incorrect or false invoice with regard to any supply made by him will be liable to pay a penalty of Rs 10,000 and therefore, non-compliance of rule 5 (1) (f) will invite aforesaid penalty.


2) Section 125 of MGST Act 2017, prescribes a general penalty for contravention of any of the provisions of the Act or the rules made thereunder.
Therefore, a registered taxable person who does not follow the provisions contained in rule 18 and rules (5) (1) (g) will be liable for penalty which may extend to Rs 25,000.
Particulars on a tax invoice: Rule 46 (b) of the MGST Rules 2017, refers to the particulars to be continued in a tax invoice. Rule 46 (b) is a consecutive serial number not exceeding 16 characters, in one or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial year.


Penalty for non-issuance of proper invoice: The above rule clearly says that the invoice has to be have a consecutive serial number. However, many a times, it is seen that the invoices are not numbered in a serial manner but are randomly numbered or not numbered at all.
It is to be noted that the same is against the provision of the Act and not following the provisions will attract penalty under section 122 (1) (I) of the MGST Act, 2017. It is also to be noted that any deviation from the provisions will be taken seriously.


This circular cannot be made use for legal interpretation of provisions of law, as it is clarificatory in nature.
If any member of trade has any doubt, he may refer the matter to State Goods and Services Tax office for further clarification. Traders should bring the contents of this circular to the notice of the members of their respective associations, informs a press release by Rajiv Jalota, Commissioner of State Tax Maharashtra State.