Amended and updated notes on section 170 of CGST Act, 2017. Detail discussion on provisions and rules related to rounding off of tax, etc.
Chapter XXI (Sections 143–174) of the Central Goods and Services Tax Act, 2017 deals with the provisions related to miscellaneous. Section 170 of CGST 2017 provides for rounding off of tax, etc.
Recently, we have discussed in detail section 169 (Service of notice in certain circumstances) of CGST Act 2017. Today, we learn the provisions of section 170 of Central GST Act 2017.
Section 170 of the Central Goods and Services Tax Act, 2017 has been notified by the Ministry of Finance vide Notification No. 1/2017-Central Tax, G.S.R. 605(E), dated 19.06.2017. This notification was come into force from 22nd June, 2017 i.e. the commencement date of section 170 is 22-6-2017.
| 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. | XXI |
| Chapter Name | Miscellaneous |
| Section No. | 170 |
| Section Name | Rounding off of tax, etc. |
| Updated 2025 Edition | GST Law Book PDF |
Section 170 of Central GST – Rounding off of tax, etc.1
Section 170 of CGST Act 2017 shall come into force on 22.06.2017 vide Notification No. 1/2017-Central Tax, G.S.R. 605(E), dated 19.06.2017.
The amount of tax, interest, penalty, fine or any other sum payable, and the amount of refund or any other sum due, under the provisions of this Act shall be rounded off to the nearest rupee and, for this purpose, where such amount contains a part of a rupee consisting of paise, then, if such part is fifty paise or more, it shall be increased to one rupee and if such part is less than fifty paise it shall be ignored.
- Section 170 of CGST Act 2017 shall come into force on 22.06.2017 vide Notification No. 1/2017-Central Tax, G.S.R. 605(E), dated 19.06.2017. ↩︎
Notes on Section 170 of CGST Act
Explanation of CGST Section 170 – Rounding Off of Tax, Interest, Penalty, Fine, Refund, and Other Amounts
Purpose of Section 170:
This section ensures uniformity in tax calculations by rounding off tax-related amounts to the nearest rupee. It eliminates complications arising from small decimal values (paise) in tax payments and refunds.
Key Provisions:
- Rounding Off to the Nearest Rupee
- Any tax, interest, penalty, fine, refund, or other sum payable/due under the Central Goods and Services Tax (CGST) Act shall be rounded to the nearest whole rupee.
- Rounding Rules:
- If the amount includes 50 paise or more, it is rounded up to the next whole rupee.
- If the amount includes less than 50 paise, it is ignored (rounded down).
Examples:
| Original Amount | Rounded Amount |
|---|---|
| ₹100.49 | ₹100 |
| ₹100.50 | ₹101 |
| ₹250.78 | ₹251 |
| ₹999.22 | ₹999 |
Significance:
- Ensures consistency in tax payments and refunds.
- Simplifies calculations for taxpayers and tax authorities.
- Eliminates disputes over minor fractional amounts.
Conclusion:
CGST Section 170 standardizes rounding off financial transactions under GST, making the process simpler and more transparent for businesses and tax authorities.
Frequently Asked Questions:
Q1: What is the purpose of rounding off amounts under GST?
Rounding off simplifies financial transactions by eliminating minor fractional amounts, ensuring consistency and ease in calculations for both taxpayers and tax authorities.
Q2: How should businesses apply rounding off in their invoices?
Businesses should apply the rounding off rule to the total amount of tax, interest, penalty, fine, or any other sum payable or refundable. For instance, if the total tax amount is ₹100.50 or more, it should be rounded up to ₹101. If it’s less than ₹100.50, it should be rounded down to ₹100.
Q3: Does rounding off apply to each individual tax component (CGST, SGST, IGST) or the total tax amount?
Rounding off should be applied to the total amount payable or refundable under each head. For example, if the CGST amount is ₹50.60, it should be rounded up to ₹51. Similarly, apply the rule separately to SGST and IGST amounts.
Q4: Are there any exceptions to this rounding off rule?
No, Section 170 applies uniformly to all amounts payable or refundable under the CGST Act, including tax, interest, penalties, fines, or any other sums.
Q5: How does rounding off affect GST returns and payments?
When filing GST returns and making payments, taxpayers should ensure that all amounts are rounded off to the nearest rupee as specified in Section 170. This ensures compliance and prevents discrepancies between reported and actual paid amounts.