Union Finance Minister Nirmala Sitharaman presented the Interim Budget 2024 before Parliament on February 1st, unveiling key proposals that include significant changes to the existing tax laws. One notable aspect is the introduction of the Finance Bill 2024, which addresses crucial amendments in the tax landscape. One of the prominent features of the Finance Bill is the proposition of a penalty amounting to Rs. 1 lakh for the failure to register specific manufacturing machines under the Goods and Services Tax (GST) Special Procedure.

To enforce this, the bill suggests the incorporation of a new provision, Section 122A, into the Central GST Act of 2017. According to the proposed Section 122A, the bill outlines the consequences for non-compliance, stating, “Where any person, engaged in the manufacture of goods subject to a special procedure related to machine registration under section 148, acts in contravention of said special procedure, they shall, in addition to any penalty under Chapter XV or other provisions of this Chapter, be liable to pay a penalty equal to one lakh rupees for every unregistered machine.” Moreover, the Finance Bill establishes that apart from the penalty, each machine not registered under the specified special procedure will be susceptible to seizure and confiscation.

However, the bill includes a provision stating that such machines may not be confiscated if the penalty is paid, and registration is completed within three days of receiving the penalty order. This move by the Finance Minister aims to reinforce compliance with GST regulations, particularly in the context of manufacturing machines. The proposed penalties underscore the government’s commitment to streamlined taxation processes and adherence to prescribed procedures. As stakeholders and businesses navigate these proposed changes, the Finance Bill 2024 signals a strategic effort to enhance regulatory measures and ensure accountability in the manufacturing sector.