Retrospective Amendment of Sec.16(5), CGST Act: Kerala GST AA deletes Penalties on Short-Paid Tax

The Kerala GST Appellate Authority (GST AA) has ruled in favor of taxpayers by deleting penalties on short-paid tax, following a retrospective amendment in Section 165 of the Central Goods and Services Tax (CGST) Act. This decision stems from the realization that penalties imposed for short payments prior to the amendment were disproportionate. The retrospective amendment clarifies the position on such penalties and allows for relief to those who faced harsh penalties due to technical or clerical errors. This ruling is expected to provide clarity on similar cases and may encourage taxpayers to review their past tax filings for potential corrections without the fear of harsh penalties.