Amended and updated notes on section 122B of CGST Act, 2017. Detail discussion on provisions and rules related to Penalty for failure to comply with track and trace mechanism.
Chapter XIX (Sections 122–138) of the Central Goods and Services Tax Act, 2017 deals with the provisions related to offences and penalties. Section 122B of CGST 2017 provides for Penalty for failure to comply with track and trace mechanism.
Recently, we have discussed in detail section 122A (Penalty for failure to register certain machines used in manufacture of goods as per special procedure) of CGST Act 2017. Today, we learn the provisions of section 122B of Central GST Act 2017.
Section 122B of the Central Goods and Services Tax Act, 2017 has not been yet notified by the Ministry of Finance.
| Name of Act | The Central Goods and Services Tax Act 2017 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Central Board of Indirect Taxes & Customs |
| Governing body | GST Council |
| Number of Chapters | 21 |
| Number of Sections | 174 |
| You are reading: | |
| Chapter No. | XIX |
| Chapter Name | Offences and Penalties |
| Section No. | 122B |
| Section Name | Penalty for failure to comply with track and trace mechanism |
| Updated 2025 Edition | GST Law Book PDF |
Section 122B of Central GST – Penalty for failure to comply with track and trace mechanism1
Section 122B newly inserted by the Finance Act 2025.
Notwithstanding anything contained in this Act, where any person referred to in clause (b) of sub-section (1) of section 148A acts in contravention of the provisions of the said section, he shall, in addition to any penalty under Chapter XV or the provisions of this Chapter, be liable to pay a penalty equal to an amount of one lakh rupees or ten per cent. of the tax payable on such goods, whichever is higher.
Section 122B has been newly inserted into the Central Goods and Services Tax (CGST) Act, 2017 by the Finance Act 2025. This section addresses penalties related to non-compliance with the track and trace mechanism.
Key Provisions of Section 122B:
- Applicability: The section applies to individuals or entities referred to in clause (b) of sub-section (1) of section 148A of the CGST Act.
- Offense: Acting in contravention of the provisions specified in section 148A.
- Penalty: Offenders are liable to pay a penalty equal to the higher of:
- ₹1,00,000 (one lakh rupees), or
- 10% of the tax payable on the concerned goods.
It’s important to note that this penalty is in addition to any other penalties that may be applicable under Chapter XV or other provisions of the CGST Act.
- Section 122B newly inserted by the Finance Act 2025. ↩︎