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Draft GST law envisages harsher penalties for tax evaders

An evasion of Rs 25 lakh could attract prison of up to a year and a fine; jail term could go up to 3 years if evasion exceeds Rs 50 lakh

Union Finance Minister Arun Jaitley briefing the media with West Bengal Finance Minister Amit Mitra, during inauguration of  GSTN meeting with all states Finance Ministers of India,  in Kolkata
Union Finance Minister Arun Jaitley briefing the media with West Bengal Finance Minister Amit Mitra, during inauguration of GSTN meeting with all states Finance Ministers of India, in Kolkata

Tax evaders could be exposed to harsher penalties, including a lower threshold for arrest provisions, according to the draft model goods and services tax (GST) law. A tax evasion of Rs 25 lakh could attract prison sentence of up to one year and a fine. The sentence could go up to three years if the evasion exceeds Rs 50 lakh. Non-bailable arrest with imprisonment of up to five years could follow if the evasion value exceeds Rs 2.5 crore, apart from fines. Ranjeet Mahtani, partner, Economic Laws Practice, said: “These provisions might affect investor confidence and raises some ...