Section 126 - General disciplines related to penalty of CGST ACT, 2017

           126. (1) No officer under this Act shall impose any penalty for minor breaches of tax
regulations or procedural requirements and in particular, any omission or mistake in
documentation which is easily rectifiable and made without fraudulent intent or gross
negligence.
              Explanation.––For the purpose of this sub-section,––
                  (a) a breach shall be considered a ‘minor breach’ if the amount of tax involved is
less than five thousand rupees;
                  (b) an omission or mistake in documentation shall be considered to be easily
rectifiable if the same is an error apparent on the face of record.
             (2) The penalty imposed under this Act shall depend on the facts and circumstances of
each case and shall be commensurate with the degree and severity of the breach.
             (3) No penalty shall be imposed on any person without giving him an opportunity of
being heard.
             (4) The officer under this Act shall while imposing penalty in an order for a breach of
any law, regulation or procedural requirement, specify the nature of the breach and the
applicable law, regulation or procedure under which the amount of penalty for the breach has
been specified.
            (5) When a person voluntarily discloses to an officer under this Act the circumstances
of a breach of the tax law, regulation or procedural requirement prior to the discovery of the
breach by the officer under this Act, the proper officer may consider this fact as a mitigating
factor when quantifying a penalty for that person.
           (6) The provisions of this section shall not apply in such cases where the penalty
specified under this Act is either a fixed sum or expressed as a fixed percentage.

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