Section 123 of CGST Act - Penalty for Failure to Furnish Information Return
Section 123 of the Central Goods and Services Tax Act, 2017 is a penalty provision in Chapter XIX. It applies when a person required to furnish an information return under Section 150 does not furnish it within the period specified in a notice issued under Section 150(3).
Section 123 - Statutory provision
If a person who is required to furnish an information return under Section 150 fails to do so within the period specified in the notice issued under sub-section (3) thereof, the proper officer may direct that such person shall be liable to pay a penalty of one hundred rupees for each day of the period during which the failure to furnish such return continues.
Maximum penalty: The penalty imposed under Section 123 cannot exceed Rs. 5,000.
Meaning and scope of Section 123
Section 123 does not impose a penalty merely because an information return was not furnished by the original due date. The provision is specifically linked to Section 150(3). It is attracted where the person is required to furnish an information return under Section 150 and continues to fail to furnish it within the period specified in the notice issued under Section 150(3).
| Provision | Section 123, Central Goods and Services Tax Act, 2017 |
|---|---|
| Chapter | Chapter XIX - Offences and Penalties |
| Default covered | Failure to furnish an information return within the period specified in a notice under Section 150(3) |
| Penalty rate | Rs. 100 for each day during which the failure continues |
| Maximum penalty | Rs. 5,000 |
| Authority | The proper officer may direct payment of the penalty |
What is an information return under Section 150?
Section 150 of the CGST Act deals with the obligation of specified persons and authorities to furnish an information return. Broadly, the provision covers persons or bodies that maintain records relating to transactions or other information relevant to GST administration and that fall within the categories specified by Section 150.
Section 150(3) enables the prescribed authority to issue a notice where an information return has not been furnished within the prescribed period. The notice requires the return to be furnished within the time stated in it. Section 123 provides the monetary consequence where that notice is not complied with.
How the penalty is calculated
The penalty is calculated at Rs. 100 for every day for which the failure continues after expiry of the period specified in the Section 150(3) notice, subject to the statutory ceiling of Rs. 5,000. Thus, even where the continuing default would mathematically produce a higher figure, the penalty under Section 123 itself cannot exceed Rs. 5,000.
Related penalty provisions
Section 123 should be read with the general penalty framework in Chapter XIX. Section 126 contains general disciplines relating to penalties, while Section 127 deals with the power to impose penalty in certain cases and requires a reasonable opportunity of being heard. Section 128 empowers the Government, on the recommendations of the GST Council and by notification, to waive specified penalties, including a penalty referred to in Section 123, for specified classes of taxpayers and mitigating circumstances.
Official GST resources
The current statutory text and related GST material should be cross-checked with official Government sources before professional reliance. The Central Board of Indirect Taxes and Customs publishes the CGST Act and GST material, while the GST common portal provides taxpayer services, notifications and related compliance resources.
Frequently asked questions
What is the penalty under Section 123 of the CGST Act?
The penalty is Rs. 100 for each day during which the failure to furnish the information return continues after the period specified in the Section 150(3) notice, subject to a maximum of Rs. 5,000.
Is Section 123 connected with Section 150?
Yes. Section 123 expressly applies to a person required to furnish an information return under Section 150 who fails to comply within the period specified in a notice issued under Section 150(3).
Can the penalty under Section 123 exceed Rs. 5,000?
No. The proviso to Section 123 caps the penalty imposed under that section at Rs. 5,000.
Last reviewed: 15 September 2026. Statutory provisions and notifications may change; verify the law applicable to the relevant tax period.