CGST Act 2017 Section 174

The Central Goods and Services Tax Act, 2017 is a comprehensive legislation that governs the levy and collection of goods and services tax in India. It consolidates various indirect taxes into a single tax regime to simplify compliance and improve tax administration.

Section 174 of the CGST Act deals with offences and penalties related to the contravention of the provisions of the Act. Understanding this section is crucial for taxpayers, businesses, professionals, and GST officers to ensure compliance and avoid legal consequences under the CGST Act.

Central Goods and Services Tax Act, 2017 Section 174 – Exact Provision

Section 174 of the CGST Act specifies the penalty for offences where no specific penalty is prescribed. It acts as a catch-all provision to ensure that any violation of the Act or its rules, not covered by other penalty provisions, is punishable. This section helps maintain discipline and compliance within the GST framework by imposing a monetary penalty up to ₹25,000.

• Applies to offences without specific penalties.

• Penalty amount can be up to ₹25,000.

• Ensures no offence goes unpunished.

• Supports overall enforcement of CGST Act.

• Acts as a deterrent against non-compliance.

Explanation of CGST Act Section 174

Section 174 addresses offences under the CGST Act or rules where no other penalty is prescribed.

• It applies to any person who commits such an offence.

• Relevant for registered persons, suppliers, recipients, and others under CGST.

• Triggered by any contravention of the Act or rules without a specified penalty.

• Penalty is monetary and capped at ₹25,000.

• Ensures all violations are penalized to maintain compliance.

Purpose and Rationale of CGST Act Section 174

This section ensures that all offences under the CGST Act are punishable, even if not explicitly mentioned elsewhere. It prevents loopholes and promotes adherence to tax laws.

• Ensures uniform enforcement of GST laws.

• Prevents tax evasion through unpunished offences.

• Streamlines compliance by covering all violations.

• Supports revenue protection for the government.

• Acts as a deterrent against non-compliance.

When CGST Act Section 174 Applies

Section 174 applies when an offence under the CGST Act or rules is committed without a prescribed penalty.

• Applicable to all types of supply—goods or services.

• Triggered by any offence not covered by other penalty sections.

• Relevant regardless of place of supply or turnover.

• Includes offences by registered and unregistered persons.

• No exceptions for minor or technical violations.

Tax Treatment and Legal Effect under CGST Act Section 174

Section 174 does not affect tax liability directly but imposes a penalty for offences. It complements other provisions relating to tax, ITC, and valuation by penalizing non-compliance.

• Penalty is independent of tax dues.

• Does not grant credit or exemption.

• Supports overall tax administration and compliance.

Nature of Obligation or Benefit under CGST Act Section 174

This section creates a compliance obligation by imposing penalties for offences without specific penalty provisions. It is mandatory and applies to all liable persons.

• Creates penalty liability for offences.

• Mandatory compliance to avoid penalties.

• Applies to all taxpayers and stakeholders under CGST.

• No benefits or exemptions provided.

Stage of GST Process Where Section Applies

Section 174 applies at the enforcement stage after an offence is detected.

• Post-supply or transaction stage.

• During assessment, audit, or scrutiny.

• Applicable at penalty imposition or prosecution stage.

• Relevant during recovery or appeal processes.

Penalties, Interest, or Consequences under CGST Act Section 174

Section 174 prescribes a penalty up to ₹25,000 for offences without specific penalties. Interest may apply under other provisions. Non-compliance can lead to prosecution.

• Penalty up to ₹25,000.

• Possible prosecution for serious offences.

• Interest charged separately if tax dues exist.

• Consequences include legal action and reputational damage.

Example of CGST Act Section 174 in Practical Use

Supplier X failed to comply with a minor procedural rule under CGST rules, for which no specific penalty was prescribed. The GST officer invoked Section 174 and imposed a penalty of ₹20,000 to ensure compliance. This case highlights how Section 174 acts as a safeguard against unpunished violations.

• Ensures all offences are penalized.

• Supports enforcement of procedural compliance.

Historical Background of CGST Act Section 174

Introduced in 2017 with the GST rollout, Section 174 was designed to cover offences lacking specific penalties. It has remained largely unchanged but is vital for comprehensive enforcement.

• Part of original CGST Act, 2017.

• Ensures no offence is left unpunished.

• Supports GST Council’s compliance objectives.

Modern Relevance of CGST Act Section 174

In 2026, Section 174 remains relevant due to evolving GST rules and digital compliance. It acts as a fallback penalty provision amid complex regulations and electronic monitoring.

• Supports digital compliance enforcement.

• Relevant for new GST rules and notifications.

• Ensures practical enforcement in digital GST environment.

Related Sections

• CGST Act, 2017 Section 7 – Scope of supply.

• CGST Act, 2017 Section 9 – Levy and collection of tax.

• CGST Act, 2017 Section 16 – Eligibility for input tax credit.

• CGST Act, 2017 Section 31 – Tax invoice.

• CGST Act, 2017 Section 39 – Furnishing of returns.

• CGST Act, 2017 Section 73 – Demand for non-fraud cases.

Case References under CGST Act Section 174

No landmark case directly interprets this section as of 2026.

Key Facts Summary for CGST Act Section 174

• Section: 174

• Title: Offences and Penalties

• Category: Penalty

• Applies To: All persons under CGST Act

• Tax Impact: Penalty for offences without specific penalty

• Compliance Requirement: Mandatory adherence to avoid penalties

• Related Forms/Returns: Applicable during assessment and audit stages

Conclusion on CGST Act Section 174

Section 174 of the CGST Act, 2017 plays a crucial role in maintaining the integrity of the GST system. By imposing penalties for offences not specifically covered elsewhere, it ensures that all violations are addressed, promoting a culture of compliance among taxpayers and professionals.

This section acts as a safety net for GST enforcement, deterring non-compliance and supporting the government's revenue collection efforts. Understanding and adhering to this provision is essential for all stakeholders to avoid penalties and legal complications under the CGST regime.

FAQs on CGST Act Section 174

What types of offences does Section 174 cover?

Section 174 covers offences under the CGST Act or rules where no specific penalty is prescribed. It ensures all violations are punishable.

Who can be penalized under Section 174?

Any person who commits an offence under the CGST Act or rules without a specified penalty can be penalized under Section 174.

What is the maximum penalty under Section 174?

The maximum penalty that can be imposed under Section 174 is ₹25,000 for the offence committed.

Does Section 174 affect GST tax liability?

No, Section 174 imposes penalties for offences but does not directly affect the GST tax liability or input tax credit.

Is prosecution possible under Section 174?

Yes, prosecution may be initiated for offences under Section 174 if the nature of the offence warrants it, alongside penalty imposition.