Section 132: Offences and the Threshold for Prosecution

Section 132 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

The criminal provision of the GST law. Its architecture is simple — a list of offences, and a table of punishments keyed to the amount involved — and almost every practical question is answered by the amount.

Section 132(1): whoever commits, or causes to commit and retain the benefits arising out of, the listed offences shall be punishable — (i) where the amount exceeds ₹500 lakh, with imprisonment up to five years and fine; (ii) where it exceeds ₹200 lakh but not ₹500 lakh, up to three years and fine; (iii) for a clause (b) offence where it exceeds ₹100 lakh but not ₹200 lakh, up to one year and fine; (iv) for a clause (f) offence, up to six months, or fine, or both. 132(4): all offences are non-cognizable and bailable except those in sub-section (5). 132(5): clause (a) to (d) offences punishable under clause (i) — above ₹500 lakh — are cognizable and non-bailable. 132(6): no prosecution except with the previous sanction of the Commissioner.

The offences

• (a) supplies goods or services without issue of any invoice, in violation of the Act or rules, with the intention to evade tax;
• (b) issues any invoice or bill without supply, in violation of the Act or rules, leading to wrongful availment or utilisation of input tax credit or refund of tax;
• (c) avails input tax credit using the invoice or bill referred to in clause (b), or fraudulently avails input tax credit without any invoice or bill;
• (d) collects any amount as tax but fails to pay it to the Government beyond three months from the due date;
• (e) evades tax or fraudulently obtains refund, where the offence is not covered under clauses (a) to (d);
• (f) falsifies or substitutes financial records, produces fake accounts or documents, or furnishes false information, with an intention to evade tax;
• (h) acquires possession of, or in any way concerns himself in transporting, removing, depositing, keeping, concealing, supplying, or purchasing or otherwise deals with goods he knows or has reasons to believe are liable to confiscation;
• (i) receives or is in any way concerned with the supply of, or otherwise deals with, any supply of services which he knows or has reasons to believe are in contravention of the Act or rules;
• (l) attempts to commit, or abets the commission of, any of the offences in clauses (a) to (f) and clauses (h) and (i).

Clause (g) — obstructing or preventing an officer in the discharge of his duties — was omitted by the Finance Act, 2023, notified through Notification No. 28/2023-CT dated 31.07.2023, w.e.f. 01.10.2023, and clauses (j) and (k) were omitted by the same amendment. So obstruction is no longer a criminal offence under s.132, though it remains a penalty offence under s.122(1)(xiii).

The punishment table

Section 132(3): the imprisonment in clauses (i), (ii) and (iii) and in sub-section (2) shall, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, be for a term not less than six months.

The Explanation defines "tax" for this section to include the tax evaded, the input tax credit wrongly availed or utilised, or the refund wrongly taken, under the CGST, SGST, IGST and UTGST Acts and the cess — so the threshold is tested on the aggregate across the Acts, not on CGST alone.

Why the threshold decides everything

Below ₹100 lakh — no punishment band in s.132(1) is engaged for most clauses, since clauses (i) to (iii) all set floors.

₹100–200 lakh — only a clause (b) offence is punishable, under clause (iii), and arrest is not available because s.69(1) requires the offence to be punishable under clause (i) or (ii) or sub-section (2).

₹200–500 lakh — punishable under clause (ii); arrest is available, but the offence remains non-cognizable and bailable, and s.69(3)(b) lets the Deputy or Assistant Commissioner grant bail with the powers of a station house officer.

Above ₹500 lakh — for clauses (a) to (d), the offence becomes cognizable and non-bailable under s.132(5), and bail is a matter for the court. Section 69 arrest →

So the first thing to compute in any investigation is the amount, on the aggregate basis the Explanation prescribes — because it determines the band, the cognizability, the bail route and whether arrest is available at all.

The three safeguards

Section 132(6) — no prosecution except with the previous sanction of the Commissioner. A senior-level check on the decision to prosecute.

Section 134 — no court shall take cognizance of any offence except with the previous sanction of the Commissioner, and no court inferior to that of a Magistrate of the First Class shall try it. So sanction operates twice, and the forum is fixed.

Section 138 — compounding. Any offence may, before or after the institution of prosecution, be compounded by the Commissioner on payment of the compounding amount — not less than 25% and not more than 100% of the tax involved, following the Finance Act, 2023 substitution — and compounding is allowed only after payment of the tax, interest and penalty involved. On payment, no further proceedings are initiated and criminal proceedings already instituted stand abated. Section 138 compounding →

The presumption, and the statement

Section 135 — presumption of culpable mental state. In any prosecution requiring a culpable mental state, the court shall presume its existence, and it shall be a defence for the accused to prove that he had no such mental state. The Explanation defines "culpable mental state" to include intention, motive, knowledge of a fact, and belief in, or reason to believe, a fact; and provides that a fact is proved only when the court believes it to exist beyond reasonable doubt, not merely on a preponderance of probability.

Section 136 — relevancy of statements. A statement made and signed on appearance in response to a s.70 summons is relevant, for proving the truth of the facts it contains, where the maker is dead, cannot be found, is incapable of giving evidence, is kept out of the way, or where his presence cannot be obtained without unreasonable delay or expense; or where he is examined as a witness and the court considers the statement should be admitted in the interest of justice.

Those two together explain why what is said under summons matters so much, and why the mental-state defence is built from contemporaneous records rather than from later assertion. Answering a summons →

Key takeaways

• Section 132 lists ten offences; clause (g) obstruction was omitted w.e.f. 01.10.2023.
• The amount decides the band, cognizability, bail and whether arrest is available.
• Above ₹500 lakh, clauses (a) to (d) are cognizable and non-bailable.
• The Explanation aggregates the amount across CGST, SGST, IGST, UTGST and cess.
• Sections 132(6) and 134 require the Commissioner's previous sanction, and only a Magistrate of the First Class may try the offence.
• Section 135 presumes a culpable mental state, with the burden on the accused to disprove it.

Read next

• Section 69: The Power to Arrest and Its Boundaries
• Section 138: Compounding of Offences and the 2023 Changes
• Section 137: Offences by Companies and the Due Diligence Defence
• Answering a GST Summons: Questions to Avoid

Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act as amended to 31 March 2026 (ICAI Bare Law, 12th edition). This is general information, not advice in any criminal proceeding.