Page 17 - Chap21 Offences & Penalties

Answer:-
Ü As per section 137 of CGST Act, 2017, if an offence is committed under GST law by a taxable person

being a trust, the managing trustee shall be deemed to be guilty of that offence and shall be liable to
be proceeded against and punished accordingly.
Ü Further, if it is proved that the offence committed by the trust has been committed:-
Ø with the consent or connivance of, or

Ø is attributable to any negligence on part of any other individual concerned with the trust,
he shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and
punished accordingly.
Ü Relevant provisions will become inapplicable for individuals concerned with the trust if they prove:

Ø that the offence was committed without their knowledge or
Ø that they had exercised all due diligence to prevent the commission of such offence.

08. Sec 138- Compounding of offences

CCP 21.07.20.00
Arjun has committed offence under CGST Act which can be compounded as per provisions of
section 138(1) of the CGST Act, 2017. He has paid the tax amount of ₹ 10 lakh involved in the

offence. He wishes to apply to Commissioner for compounding the said offence. You are required
to compute minimum and maximum compounding amount as per provisions of section 138(2) of
the CGST Act, 2017 payable by Arjun. What are the consequences, if Arjun pays such compounding
amount as may be determined by Commissioner? [CA Final Nov 22 Exam]
Answer:-

Ü Minimum limit for compounding amount is :-
Ø 25% of tax involved, viz., ₹ 2,50,000 (₹ 10 lakh × 25%) or
i.e. ₹ 2,50,000.
Ü Maximum limit for compounding amount is: -

Ø 100% of tax involved, viz., ₹ 10,00,000 (₹ 10 lakh × 100%)
i.e. ₹ 10,00,000.
Ü If Arjun pays such compounding amount as may be determined by Commissioner, no further
proceedings shall be initiated under this Act against him in respect of the same offence and any

criminal proceedings, if already initiated in respect of the said offence, shall stand abated.

CCP 21.08.21.00

Ganesh Enterprises, a registered supplier under the GST law, has committed an offence that is
compoundable. The Department has instituted prosecution against the proprietor of Ganesh
Enterprises and he is of the opinion that he shall not be able to apply for compounding of the
offence as the prosecution has been launched. He seeks your advice whether he has the

opportunity to apply for compounding of the offence and the consequences arising therefrom.
[CA Final Nov 19 Exam New]
Answer :-
Ü As per section 138 of CGST Act, a person accused of an offence is permitted to make an application

for compounding of an offence even after the institution of prosecution against him.
Ü Therefore, in the given case, Ganesh Enterprises can apply for compounding of offence even

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