236.            A Ltd., supplies printers worth Rs 100,000 in the month of March, 2017 on which GST is charged @ 12%. The printer was misclassified under wrong head to evade tax & shall be chargeable @ 18% resulting in tax short paid by Rs. 6,000. Determine what shall be the penalty imposed if the interest is payable on such tax short paid.

The taxable person makes the following payment on 16.06.2017.

(i) if tax paid = 6,000, interest @ 18% , penalty = 900

(ii) if tax paid= 5,000, interest paid =140, penalty = 500

(iii) if tax paid = 6,000, interest paid = nil, penalty= 500

(iv) if tax paid =6,000, interest paid = 119, penalty = nil

(v) if tax paid = nil, interest = nil, penalty = 900

Since misclassification was done to evade tax thus, it is a case of fraud & accordingly section 74 is applicable. As per section 74(5) of the CGST Act, taxable person shall pay before issue of SCN the following amounts:

Time period : due date of payment of tax till actual date of payment of tax

                   i.e., from due date 20.4.2017 till 16.6.2017 = 57 days.

(i) The taxable person has paid full amount of tax, interest and penalty mentioned above. The proceeding is concluded.

(ii) tax paid is short by 1,000 & interest by 29, penalty by 400. The taxable person shall pay the amount before issue of show cause notice otherwise proper officer may issue show cause notice demanding the amounts.

(iii) the tax paid is 6,000, penalty short paid by 400 & interest not paid 169. The taxable person shall pay the interest amount Rs 169 & penalty Rs 400 before issue of SCN or the proper officer may issue show cause notice.

(iv) the tax paid is 6,000 but interest is paid short paid by Rs 50 (169-119) & penalty not paid is Rs 900. The taxable person may pay the remaining dues before issue of SCN, otherwise proper officer shall issue show cause notice.

(v) tax & interest is not paid but penalty is paid. either the taxable person pays remaining dues or the proper officer shall issue a show cause notice.