Implications of amendments in GST dated 15.10.2020 in Rule 142 of the CGST Rules

CA. Heet Shah | Last updated: 21 October 2020

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The CGST Rules, specifically Rule 142, have been amended on 15.10.2020. Previously, tax officers were mandated to communicate tax, interest, and penalty details in FORM GST DRC-01A before issuing a notice. The amendment now grants officers discretion to issue a notice directly, which can result in a higher penalty of 25% if paid after the notice, compared to 15% if paid based on the pre-notice communication.

Prior to the amendment to Rule 142 of CGST Rules.

According to Rule 142 of CGST Rule, The proper officer, before servicing notice u/s Section 73(1) or Section 74(1) of CGST Act to a Registered Person, SHALL MANDATORILY Communicate the details of any tax, interest and penalty as ascertained by the said officer, in Part A of FORM GST DRC-01A. Further according to Section 74(5) of CGST Act, If a Registered Person pays the demanded amount as ascertained and communicated by the proper officer in FORM GST DRC-01A then such Registered Person is liable to pay Penalty equivalent to 15%

GST Rule 142 Amendments: What You Need to Know

Otherwise, If that registered person pays the demanded amount, after servicing of notice u/s Section 73(1) or Section 74(1) of CGST Act, then such registered person is liable to pay Penalty equivalent to 25% according to Section 74(8) of CGST Act,

Post amendment vide notification no.79/2020 dated 15.10.2020 in Rule 142 of CGST Rule,

The proper officer MAY in his or her DISCRETION, before servicing notice u/s Section 73(1) or Section 74(1) of CGST Act to a Registered Person, Communicate the details of any tax, interest and penalty as ascertained by the said officer, in Part A of FORM GST DRC-01A. So now and onwards The proper officer MAY in his or her DISCRETION not Communicate FORM GST DRC-01A before servicing Notice and directly service a Notice u/s Section 73(1) or Section 74(1) of CGST Act on any Registered Person. In that case, Such a Registered Person should have to pay a Penalty equivalent to 25% according to Section 74(8) of the CGST Act.

Reference:
Notification No. 79 /2020 - Central Tax

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