Section 126 of CGST Act, 2017 : Section 126: General Disciplines Related To Penalty

Explanation using Example

Imagine a small business owner, Mr. Sharma, who has recently started dealing in electronic goods. While filing his monthly GST returns, he inadvertently enters the wrong HSN (Harmonized System of Nomenclature) code for a particular item, leading to a minor discrepancy in the tax amount, which is less than five thousand rupees. Upon noticing the mistake, Mr. Sharma promptly corrects the error and informs the GST officer about the oversight.

In this case, Section 126 of The Central Goods and Services Tax Act, 2017 would apply. Given that the mistake is a minor breach with no fraudulent intent or gross negligence, and the tax involved is less than five thousand rupees, the GST officer would likely not impose any penalty on Mr. Sharma. Additionally, since Mr. Sharma voluntarily disclosed the mistake before it was discovered by the officer, this act could be considered a mitigating factor, potentially reducing any penalty that might otherwise have been imposed.