Section 125 of CGST Act, 2017 : Section 125: General Penalty

Explanation using Example

Imagine a business owner, Mr. Sharma, who runs a small electronics store. He is required to maintain proper records of his sales and purchases as per the GST laws. One day, during a routine inspection by a tax officer, it is discovered that Mr. Sharma has not maintained the purchase invoices for the last six months. This is a contravention of the GST rules which mandate maintaining proper records.

Since there is no specific penalty mentioned in the GST Act for not maintaining purchase invoices, the tax officer invokes Section 125 of the Central Goods and Services Tax Act, 2017. Mr. Sharma is then liable to a penalty which may extend to twenty-five thousand rupees for this contravention.