Section 132 of the Central Goods and Services Tax Act, 2017 deals with criminal offences under GST and the punishment prescribed for those offences. It is one of the most important provisions in Chapter XIX of the CGST Act because certain serious GST violations can result not merely in a tax demand or monetary penalty, but also in criminal prosecution, imprisonment and fine.
The provision covers offences such as issuing invoices without actual supply, availing input tax credit through fraudulent invoices, evading tax, fraudulently obtaining refunds, falsifying financial records and dealing with goods or services known to be in contravention of GST law.
Section 132 has been amended over time. In particular, the Finance Act, 2020 modified the wording and scope of certain offences, while the Finance Act, 2023 decriminalised certain offences by omitting clauses (g), (j) and (k) from Section 132(1), effective from 1 October 2023. The current provision therefore needs to be understood based on its amended wording rather than the original 2017 text.
What Is Section 132 of the CGST Act?
Section 132 is titled “Punishment for certain offences.”
It identifies specific conduct that can attract criminal punishment under the CGST Act.
The provision covers offences involving:
- supply without invoice with intent to evade tax;
- issuing invoices without actual supply in specified circumstances;
- fraudulent availment of input tax credit;
- collecting tax but not paying it to the Government within the prescribed period;
- tax evasion or fraudulent refund;
- falsification of financial records or production of fake accounts or documents;
- dealing with goods liable to confiscation with the required knowledge or reason to believe; and
- dealing with specified supplies of services while knowing or having reason to believe that they contravene GST law.
Section 132(1) also covers attempts to commit or abet the commission of specified offences.
Why Is Section 132 Important?
GST compliance generally involves several different consequences.
Depending on the circumstances, a taxpayer may face:
- payment of tax;
- interest;
- monetary penalty;
- detention or seizure of goods;
- confiscation;
- recovery proceedings; or
- criminal prosecution.
Section 132 is concerned with the criminal punishment aspect.
Therefore, Section 132 should not be confused with provisions such as Section 122, which deals with monetary penalties for specified offences.
A tax demand and a criminal prosecution are legally different matters. A person should not assume that payment of a tax demand automatically determines whether prosecution can or cannot arise under Section 132.
The Act itself also makes this distinction clear in Section 131, which provides that confiscation or penalty under the Act does not prevent other punishment to which a person may be liable under the Act or another law.
Section 132(1) – Offences Covered Under the Provision
Section 132(1) contains the main list of offences.
The current provision begins by covering a person who commits, or causes to commit and retains the benefits arising out of, the specified offences. This wording is important because the provision is not limited only to the person who physically performs the act.
The major offences currently covered are discussed below.
Section 132(1)(a) – Supply Without Invoice With Intent to Evade Tax
The first offence relates to supplying goods or services, or both, without issuing an invoice in violation of the GST Act or Rules with the intention to evade tax.
This provision therefore contains an important element of intent.
A simple procedural mistake should not automatically be treated as an offence under Section 132(1)(a). The statutory requirement relating to the intention to evade tax is important.
Example
Suppose a registered business deliberately sells taxable goods without issuing the required tax invoices so that the transactions remain outside its books and the corresponding GST is not paid.
If the statutory conditions are established, the conduct may fall within Section 132(1)(a).
Section 132(1)(b) – Invoice Without Supply
Section 132(1)(b) deals with issuing an invoice or bill without the supply of goods or services or both, where the conduct is in violation of the Act or Rules and leads to wrongful availment or utilisation of input tax credit or refund of tax.
This is commonly associated with what is generally described as fake invoicing.
Example
Company A issues a GST invoice to Company B for goods worth ₹50 lakh, but no goods are actually supplied.
If the invoice is used to enable wrongful ITC or refund, the conduct may attract Section 132(1)(b), subject to the statutory requirements and evidence.
Section 132(1)(c) – Fraudulent ITC
Section 132(1)(c) covers:
- availing input tax credit using an invoice or bill referred to in clause (b); or
- fraudulently availing input tax credit without any invoice or bill.
The latter part was introduced through the Finance Act, 2020 and brought into force from 1 January 2021.
This provision is particularly important in cases involving fraudulent ITC arrangements.
Example
A person obtains an invoice from a supplier who has not actually supplied the underlying goods or services and uses that invoice to claim ITC.
If the statutory ingredients of the offence are established, Section 132(1)(c) may apply.
Section 132(1)(d) – Collecting Tax but Not Paying It
Section 132(1)(d) covers a person who collects an amount as tax but fails to pay it to the Government beyond three months from the date on which the payment becomes due.
This is different from merely delaying payment by a short period.
The provision specifically refers to the three-month period.
Example
A business collects GST from customers and is required to deposit the amount with the Government.
If the person collects the amount as tax and continues to retain it beyond the statutory period, the conduct may fall within Section 132(1)(d), subject to the other requirements of the law.
Section 132(1)(e) – Tax Evasion or Fraudulent Refund
Section 132(1)(e) covers:
- evasion of tax; or
- fraudulent obtaining of refund,
where the offence is not covered under clauses (a) to (d).
This is a broader provision covering specified tax evasion or fraudulent refund situations that are not already covered by the earlier clauses.
Example
Suppose a person deliberately creates a fraudulent arrangement to obtain a GST refund to which the person is not entitled.
Where the statutory conditions are satisfied, the conduct may fall under Section 132(1)(e).
Section 132(1)(f) – Falsification of Records and Fake Documents
Section 132(1)(f) covers a person who:
- falsifies or substitutes financial records;
- produces fake accounts or documents; or
- furnishes false information,
with the intention to evade payment of tax due under the CGST Act.
The requirement relating to the intention to evade payment of tax is important.
Example
A business deliberately creates false purchase records and fake accounting entries to reduce its taxable turnover and GST liability.
If the required statutory conditions are proved, Section 132(1)(f) may apply.
Clauses (g), (j) and (k) Were Omitted
An important current-law point is that clauses (g), (j) and (k) of Section 132(1) were omitted with effect from 1 October 2023.
These clauses previously covered:
- obstructing or preventing an officer in the discharge of duties;
- tampering with or destroying material evidence or documents; and
- failure to provide required information or supplying false information in the circumstances specified in the provision.
The Finance Act, 2023 removed these clauses from Section 132(1). The corresponding reference in clause (l) was also narrowed, and related changes were made to the punishment provisions.
This is an important distinction between older explanations of Section 132 and the current statutory framework.
Section 132(1)(h) – Dealing With Goods Liable to Confiscation
Section 132(1)(h) covers a person who acquires possession of, or is in any way concerned with:
- transporting;
- removing;
- depositing;
- keeping;
- concealing;
- supplying;
- purchasing; or
- otherwise dealing with
goods which the person knows or has reason to believe are liable to confiscation under the CGST Act or Rules.
The knowledge or reason-to-believe requirement is an important part of the provision.
Example
Suppose a person knowingly purchases goods that are being transported in a manner that makes them liable to confiscation under GST law.
If the statutory conditions are satisfied and the person knows or has reason to believe that the goods are liable to confiscation, Section 132(1)(h) may become relevant.
Section 132(1)(i) – Dealing With Contravening Services
Section 132(1)(i) concerns a person who receives or is otherwise concerned with the supply of services, or deals with a supply of services, knowing or having reason to believe that the supply contravenes provisions of the CGST Act or Rules.
Again, the statutory wording contains a knowledge or reason-to-believe element.
The provision therefore should not be interpreted as making every recipient of a service automatically criminally liable merely because the supplier has committed a GST violation.
The particular facts and statutory ingredients must be established.
Section 132(1)(l) – Attempting or Abetting Certain Offences
Section 132(1)(l) covers attempting to commit or abetting the commission of the offences mentioned in:
- clauses (a) to (f); and
- clauses (h) and (i).
This wording was narrowed through the Finance Act, 2023 after clauses (g), (j) and (k) were removed.
Therefore, the current provision should not be described using the older reference to all clauses (a) to (k).
Punishment Under Section 132(1)
Section 132 provides graded punishment based primarily on the amount of:
- tax evaded;
- input tax credit wrongly availed or utilised; or
- refund wrongly taken.
The statutory thresholds are important.
Where the Amount Exceeds ₹5 Crore
Where the relevant amount exceeds ₹5 crore, the offence is punishable with:
- imprisonment for a term which may extend to five years; and
- fine.
This is the highest punishment bracket under Section 132(1).
Where the Amount Exceeds ₹2 Crore but Does Not Exceed ₹5 Crore
Where the relevant amount:
- exceeds ₹2 crore; and
- does not exceed ₹5 crore,
the punishment may extend to:
- imprisonment for three years; and
- fine.
Offence Under Clause (b) Between ₹1 Crore and ₹2 Crore
The current Section 132 contains a specific rule for an offence under clause (b) where the relevant amount:
- exceeds ₹1 crore; and
- does not exceed ₹2 crore.
The punishment may extend to:
- imprisonment for one year; and
- fine.
This is an important change from older versions of Section 132, where the corresponding monetary threshold was described differently.
The Finance Act, 2023 specifically changed clause (iii) so that this one-year imprisonment bracket applies to an offence specified in clause (b).
Summary of Major Punishment Thresholds
| Relevant amount / offence | Maximum imprisonment | Fine |
|---|---|---|
| Amount exceeds ₹5 crore | Up to 5 years | Yes |
| Amount exceeds ₹2 crore but does not exceed ₹5 crore | Up to 3 years | Yes |
| Clause (b) offence exceeding ₹1 crore but not exceeding ₹2 crore | Up to 1 year | Yes |
| Clause (f) offence | Up to 6 months | Fine or both, as applicable under the provision |
The monetary amount is determined according to the statutory formulation covering tax evaded, ITC wrongly availed or utilised, or refund wrongly taken, as applicable.
Six-Month Punishment for Clause (f)
Section 132(1)(iv), as amended, provides that a person who commits or abets an offence specified in clause (f) may be punished with:
- imprisonment for a term which may extend to six months; or
- fine; or
- both.
The earlier references to clauses (g) and (j) were removed following the Finance Act, 2023 amendments.
Section 132(2) – Repeat Conviction
Section 132(2) deals with a person who has already been convicted of an offence under Section 132 and is subsequently convicted again under the same section.
In such a case, the person may be punished for the second and every subsequent offence with:
- imprisonment for a term which may extend to five years; and
- fine.
This provision deals specifically with repeat convictions.
Section 132(3) – Minimum Imprisonment in Certain Cases
Section 132(3) provides that the imprisonment referred to in clauses (i), (ii) and (iii) of Section 132(1), as well as the imprisonment under Section 132(2), shall, in the absence of special and adequate reasons to the contrary recorded in the judgment of the Court, be not less than six months.
Therefore, the provision contains both:
- a maximum imprisonment period; and
- a statutory minimum subject to the court recording special and adequate reasons to impose a lesser term.
Section 132(4) – Cognizable and Bailable Nature of Offences
Section 132(4) provides the general rule that offences under the CGST Act are non-cognizable and bailable, except offences covered by Section 132(5).
This means that not every offence under Section 132 automatically carries the same arrest and bail consequences.
The classification depends on the particular offence and punishment bracket.
Section 132(5) – Cognizable and Non-Bailable Offences
Section 132(5) creates an exception to the general rule.
The offences specified in:
- Section 132(1)(a);
- Section 132(1)(b);
- Section 132(1)(c); and
- Section 132(1)(d),
when punishable under Section 132(1)(i), are cognizable and non-bailable.
Section 132(1)(i) is the punishment category where the relevant amount exceeds ₹5 crore.
Therefore, the statutory framework specifically connects the most serious monetary category of offences under clauses (a) to (d) with cognizable and non-bailable status.
CBIC’s GST FAQ similarly explains that offences involving tax evasion, wrongful ITC or fraudulent refund exceeding ₹5 crore are treated as cognizable and non-bailable under Section 132.
Cognizable and Non-Cognizable – Simple Meaning
A cognizable offence generally refers to an offence for which the law gives specified authorities the power to take investigative or arrest-related action without the same prior court process applicable to a non-cognizable offence.
A non-cognizable offence is treated differently under criminal procedure.
However, GST is a special statutory framework. Therefore, the exact powers of GST officers must be understood from the CGST Act and applicable procedural law rather than assuming that every GST offence is treated in the same way as an ordinary IPC/BNS offence.
CBIC specifically notes that GST officers exercise powers under the GST law as duly empowered officers.
Section 132(6) – Previous Sanction of Commissioner
Section 132(6) provides that a person cannot be prosecuted for an offence under Section 132 except with the previous sanction of the Commissioner.
This means that prosecution under Section 132 is subject to the statutory sanction requirement.
The provision therefore distinguishes prosecution under GST from an ordinary private criminal complaint that can simply be initiated without following the GST Act’s specific requirements.
Meaning of “Tax” for Section 132
The Explanation to Section 132 provides a broad meaning of the term “tax” for the purposes of the section.
It includes:
- tax evaded;
- input tax credit wrongly availed or utilised;
- refund wrongly taken,
under the:
- CGST Act;
- State Goods and Services Tax Act;
- Integrated Goods and Services Tax Act;
- Union Territory Goods and Services Tax Act; and
- GST Compensation Cess law.
This is important because the monetary thresholds in Section 132 are not limited to a narrow calculation of only CGST.
Section 132 and Fake Invoices
Fake invoices are one of the most significant areas associated with Section 132.
A typical fraudulent invoice arrangement may involve:
- An invoice being issued without an actual supply.
- The recipient using that invoice to claim ITC.
- The recipient using the ITC to reduce tax liability.
- The supplier or another person retaining a benefit from the arrangement.
Depending on the exact conduct and evidence, Section 132(1)(b) and Section 132(1)(c) may become relevant.
The provision should not, however, be applied merely because an invoice is disputed. The statutory ingredients and evidence must be examined in the particular case.
Section 132 and Fraudulent ITC
Fraudulent ITC can arise in different forms.
Examples may include:
- using an invoice without actual supply;
- fraudulently availing ITC without an invoice; or
- participating in arrangements involving invoices that do not correspond to genuine supplies.
Section 132(1)(c) specifically addresses fraudulent ITC in the circumstances described by the provision.
Section 132 and Fraudulent Refund
GST refunds are available under various statutory circumstances.
However, obtaining a refund through fraudulent means can result in criminal consequences.
Section 132 covers fraudulent refund through clauses (b) and (e), depending on the facts and nature of the conduct.
A person should therefore maintain proper records supporting the basis of every refund claim.
Section 132 and Tax Evasion
Tax evasion under Section 132 is not simply the same thing as an accidental tax short payment.
The provision identifies particular offences and, in several clauses, contains requirements such as:
- intention to evade tax;
- fraud;
- knowledge; or
- reason to believe.
Therefore, the precise facts and statutory ingredients are important when determining whether conduct falls within Section 132.
Section 132 and Section 122
Section 122 deals primarily with penalties for certain offences, while Section 132 deals with criminal punishment for specified offences.
| Section 122 | Section 132 |
|---|---|
| Monetary penalty provision | Criminal punishment provision |
| Covers numerous GST contraventions | Covers specified serious offences |
| Generally involves tax/penalty consequences | Can involve imprisonment and fine |
| Part of Chapter XIX | Part of Chapter XIX |
The same underlying conduct can sometimes have consequences under multiple provisions, subject to the specific statutory framework.
Section 132 and Section 129
Section 129 deals with detention, seizure and release of goods and conveyances in transit where goods are transported or stored in transit in contravention of GST law.
Section 132 is different because it deals with criminal offences and punishment.
For example:
- Section 129 → transit-related detention/seizure/release mechanism.
- Section 132 → prosecution and criminal punishment for specified offences.
A detention of goods under Section 129 does not automatically mean that the person has been convicted of a Section 132 offence.
Section 132 and Section 130
Section 130 deals with confiscation of goods or conveyances and levy of penalty in specified circumstances.
Section 132 deals with punishment for criminal offences.
The two provisions therefore operate in different areas, although the same factual circumstances may potentially give rise to consequences under more than one provision.
Section 132 and Section 69 – Arrest
Section 69 deals with the power to arrest.
It connects the arrest power to specified offences under Section 132.
Section 69 provides that where the Commissioner has reasons to believe that a person has committed an offence specified in Section 132(1)(a) to (d) that is punishable under Section 132(1)(i) or Section 132(2), the Commissioner may authorise an officer of central tax to arrest that person.
Therefore:
Section 132 → Creates and categorises the criminal offence
Section 69 → Provides the statutory arrest mechanism for specified offences
This distinction is important.
Does Every Section 132 Offence Lead to Arrest?
No.
Section 132 contains several offences, while Section 69 specifically identifies the circumstances in which arrest can be authorised.
The statutory framework therefore does not mean that every allegation of a Section 132 offence automatically results in arrest.
The nature of the offence, punishment category and statutory conditions have to be considered.
Section 132 and Prosecution
Section 132 provides the substantive criminal offences and punishments.
Other provisions in Chapter XIX govern related prosecution matters.
For example, Section 134 provides that no court shall take cognizance of an offence punishable under the CGST Act or Rules except with the previous sanction of the Commissioner, and a court below the rank specified in that provision cannot try the offence.
Thus, Section 132 should be read together with the other provisions governing prosecution.
Section 132 and Culpable Mental State
Section 135 deals with the presumption of culpable mental state in prosecutions for offences under the CGST Act where such mental state is required.
It provides that the court shall presume the existence of the required culpable mental state, but it is a defence for the accused to prove that the required mental state did not exist with respect to the act charged.
This provision becomes relevant when considering offences under Section 132 that contain elements such as intention, knowledge or other required mental states.
Section 132 and Statements Made During Summons
Section 136 deals with the relevancy of statements made and signed by a person during appearance in response to a summons.
Therefore, Section 132 proceedings should also be understood alongside the procedural provisions dealing with evidence and statements during GST investigations.
A person receiving a summons should carefully understand the documents requested and the questions being asked and should provide truthful information.
Section 132 and Companies
Section 137 deals with offences by companies.
Where an offence is committed by a company, the company and persons who were in charge of and responsible for the conduct of the business can, subject to the statutory conditions, be proceeded against.
The provision also contains specific rules concerning directors, managers, secretaries and other officers and provides a defence where the person proves that the offence was committed without their knowledge or that they exercised due diligence to prevent it.
This is particularly important for businesses because a Section 132 issue involving a company can raise separate questions concerning the liability of individuals connected with the company’s management.
Section 132 and Compounding
Section 138 deals with compounding of offences.
The Finance Act, 2023 also amended the compounding framework alongside the amendments to Section 132.
Compounding is a separate statutory mechanism and should not be confused with simply paying a GST demand.
The availability and conditions for compounding depend on Section 138 and the applicable Rules.
Practical Example – Invoice Without Supply
Suppose Company A issues an invoice for ₹3 crore to Company B, but no goods or services are actually supplied.
Company B uses the invoice to claim ITC.
If the statutory requirements are established, the conduct may involve Section 132(1)(b), while the recipient’s conduct may also be examined under Section 132(1)(c).
The exact liability of each person depends on their individual conduct and the evidence available.
Practical Example – Tax Collected but Not Paid
Suppose a business collects GST from customers as part of its invoices.
The business is required to pay the collected tax to the Government but retains the amount beyond the period specified in Section 132(1)(d).
Where the statutory conditions are satisfied, criminal consequences under Section 132 may arise in addition to the tax and interest consequences under the GST law.
Practical Example – Fake Accounting Records
Suppose a taxpayer deliberately creates fake purchase records to show purchases that never occurred and uses those records to reduce GST liability.
If the statutory ingredients of Section 132(1)(f) are established, the conduct may attract the punishment provided for that offence.
Practical Example – Goods Liable to Confiscation
Suppose a person knowingly purchases goods that are liable to confiscation and has reason to believe that the goods are being dealt with in violation of GST law.
Section 132(1)(h) may become relevant where the statutory conditions are satisfied.
The person’s knowledge or reason to believe is important under the provision.
Practical Compliance Measures for Businesses
Businesses can reduce the risk of serious GST offences by maintaining strong compliance systems.
Maintain Genuine Purchase Records
Purchase invoices should correspond to genuine transactions.
Verify Suppliers
Businesses should perform appropriate supplier verification and maintain supporting documents for significant transactions.
Reconcile ITC
Input tax credit should be reconciled with available GST records and supporting purchase documentation.
Maintain Proper Books
Accounting records should accurately reflect actual business transactions.
Avoid Accommodation Invoices
Businesses should not issue or accept invoices that do not represent genuine supplies.
Maintain Refund Documentation
Every refund claim should be supported by appropriate records and documents.
Train Employees
Employees responsible for GST invoices, returns, ITC and accounting should understand the consequences of fraudulent practices.
Preserve Evidence
Contracts, invoices, e-way bills, payment records, delivery documents and accounting records should be properly preserved.
Important Difference Between Error and Criminal Offence
A critical practical point is that not every GST mistake is automatically a Section 132 offence.
GST compliance can involve genuine mistakes such as:
- incorrect classification;
- data-entry errors;
- delayed reporting;
- reconciliation differences;
- incorrect interpretation of a provision; or
- other procedural issues.
Section 132 contains specific statutory ingredients for the offences it covers.
Several clauses expressly refer to matters such as:
- intention to evade tax;
- fraud;
- knowledge; or
- reason to believe.
Therefore, whether particular conduct constitutes a Section 132 offence depends on the facts, evidence and applicable statutory requirements.
Current Changes to Section 132
The current Section 132 is materially different from its original 2017 version.
Finance Act, 2020
The Finance Act, 2020 amended Section 132, including the wording of the opening part of sub-section (1) and clause (c). The changes were brought into force from 1 January 2021.
Finance Act, 2023
The Finance Act, 2023 subsequently:
- omitted clauses (g), (j) and (k);
- narrowed clause (l);
- modified the threshold-related wording in clause (iii); and
- removed references to omitted offences from clause (iv).
These amendments became effective from 1 October 2023.
This is why older articles explaining Section 132 may contain offences that are no longer included in the current Section 132(1).
Section 132 – Current Offence Structure at a Glance
| Clause | Main offence |
|---|---|
| 132(1)(a) | Supply without invoice with intention to evade tax |
| 132(1)(b) | Invoice/bill without supply leading to wrongful ITC/refund |
| 132(1)(c) | Fraudulent ITC using specified invoice or without invoice |
| 132(1)(d) | Collecting tax and failing to pay Government beyond three months |
| 132(1)(e) | Tax evasion or fraudulent refund not covered by (a)–(d) |
| 132(1)(f) | Falsification of financial records/fake accounts/documents/false information with intent to evade tax |
| 132(1)(h) | Dealing with goods known or believed to be liable to confiscation |
| 132(1)(i) | Dealing with specified contravening services with knowledge/reason to believe |
| 132(1)(l) | Attempting or abetting specified offences |
Clauses (g), (j) and (k) are no longer part of Section 132(1) following the 2023 amendment.
Section 132 – Punishment Structure at a Glance
| Situation | Maximum punishment |
|---|---|
| Relevant amount exceeds ₹5 crore | Up to 5 years imprisonment + fine |
| Relevant amount exceeds ₹2 crore but does not exceed ₹5 crore | Up to 3 years imprisonment + fine |
| Clause (b) offence exceeding ₹1 crore but not exceeding ₹2 crore | Up to 1 year imprisonment + fine |
| Clause (f) offence | Up to 6 months, or fine, or both |
| Second/subsequent conviction | Up to 5 years imprisonment + fine |
The imprisonment provisions are subject to the detailed wording and conditions of Section 132, including the minimum-imprisonment rule in Section 132(3).
Section 132 – Relationship With Important GST Sections
| Section | Subject | Relationship with Section 132 |
|---|---|---|
| Section 122 | Penalty for certain offences | Monetary penalty framework |
| Section 129 | Detention, seizure and release of goods/conveyances in transit | Transit enforcement |
| Section 130 | Confiscation of goods/conveyances | Confiscation proceedings |
| Section 131 | Confiscation/penalty not to interfere with other punishments | Preserves other punishment |
| Section 134 | Cognizance of offences | Court’s cognizance and sanction |
| Section 135 | Presumption of culpable mental state | Relevant in prosecution |
| Section 136 | Relevancy of statements | Statements made during summons |
| Section 137 | Offences by companies | Liability of companies and responsible persons |
| Section 138 | Compounding of offences | Statutory compounding mechanism |
These provisions should be read together when examining a GST prosecution matter.
Key Points to Remember About Section 132
Section 132 is primarily concerned with serious GST offences that can result in criminal prosecution.
The most important points are:
- Section 132 is titled “Punishment for certain offences.”
- It is part of Chapter XIX of the CGST Act.
- It covers specified serious GST offences.
- It covers supply without invoice with intent to evade tax.
- It covers issuing invoices without actual supply in specified circumstances.
- It covers fraudulent availment of ITC.
- It covers fraudulent refunds.
- It covers specified cases of tax evasion.
- It covers falsification of financial records and fake accounts or documents.
- It covers specified dealings with goods liable to confiscation.
- It covers specified dealings with contravening services.
- It covers attempts and abetment of specified offences.
- Clauses (g), (j) and (k) of Section 132(1) were omitted with effect from 1 October 2023.
- The punishment depends on the offence and, in relevant cases, the amount of tax evaded, ITC wrongly availed or utilised, or refund wrongly taken.
- Amounts exceeding ₹5 crore fall within the highest punishment bracket.
- The highest punishment under Section 132(1) may extend to five years’ imprisonment and fine.
- Repeat conviction can attract imprisonment up to five years and fine.
- Section 132(3) contains a six-month minimum imprisonment rule for specified imprisonment categories unless the court records special and adequate reasons to the contrary.
- Most offences under the Act are non-cognizable and bailable, subject to the exception in Section 132(5).
- Specified offences under clauses (a) to (d), when falling within the highest punishment category under clause (i), are cognizable and non-bailable.
- Prosecution under Section 132 requires previous sanction of the Commissioner.
- Section 132 should be distinguished from monetary penalty provisions such as Section 122.
- Section 69 contains the arrest mechanism for specified Section 132 offences.
- Section 137 deals with offences committed by companies and the potential liability of responsible persons.
- Section 138 provides the statutory framework for compounding certain offences.
Conclusion
Section 132 of the CGST Act is the principal provision dealing with criminal punishment for specified GST offences. It goes beyond ordinary tax assessment and monetary penalties by providing for prosecution, imprisonment and fine in cases covered by the statutory offence provisions.
The section covers serious conduct such as issuing invoices without actual supply, fraudulently availing input tax credit, evading tax, fraudulently obtaining refunds, falsifying financial records and knowingly dealing with goods or specified services in contravention of GST law.
The punishment depends on the nature of the offence and, in the major monetary categories, the amount involved. Where the relevant amount exceeds ₹5 crore, Section 132(1)(i) provides for imprisonment that may extend to five years along with fine. For amounts exceeding ₹2 crore but not exceeding ₹5 crore, imprisonment may extend to three years with fine. A specific one-year category applies to an offence under clause (b) where the relevant amount exceeds ₹1 crore but does not exceed ₹2 crore.
An important current-law development is the Finance Act, 2023 amendment, under which clauses (g), (j) and (k) of Section 132(1) were omitted with effect from 1 October 2023. The related provisions concerning abetment, punishment and compounding were also adjusted. Therefore, older articles that continue to list obstruction of officers, tampering with evidence or failure to provide information as independent offences under Section 132(1) are not describing the current wording of the provision.
Section 132 should also be read together with Sections 69, 122, 129, 130, 134, 135, 136, 137 and 138. These provisions address related issues such as arrest, monetary penalties, detention and confiscation, prosecution, culpable mental state, statements, company liability and compounding.
For businesses, the practical importance of Section 132 is clear: GST compliance should be supported by genuine invoices, accurate accounting records, proper ITC documentation, correct tax payment, valid refund claims and reliable transaction records. At the same time, whether particular conduct amounts to a criminal offence under Section 132 depends on the specific statutory ingredients, facts and evidence of the case.
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