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Section 170 of GST – Rounding off of tax, etc
Statutory provision
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.
Analysis and Updates
Introduction
This provision enables the tax payers and also the departmental authorities to round off the amounts calculated as per the law, if the amounts are in fraction of a rupee.
Analysis
(i) Amounts covered: Tax, interest, penalty, fine or any other sum payable, and refund or any other sum due, under the Act.
(ii) The above amounts shall be rounded off as under:
| If amount contains a part of the rupee | Effect |
| ≥ 50 paise | Must be increased to one rupee |
| < 50 paise | Part to be ignored |
(iii) The rounding off need not be done for every part of the tax contained in the invoice, whereas consolidated payment to Government has to be rounded off.
(iv) The above provision is applicable for the assessee, for the department (while issuing show cause notice or passing the order, etc.) and also for the Appellate Authorities.
Comparative review
Similar enabling provisions are available in Central Excise Act (Sec.37D), Service Tax Provisions (Sec.83 of the Finance Act 1994) and also in State VAT Provisions.
Related provisions
This provision shall apply to any amount calculated under the other provisions of the Act.
Frequently Asked Questions
If the Show Cause Notice mentions the tax as Rs.102.30 and penalty as Rs.102.30, then what is the amount payable?
As per Sec.170, if the paise is less than 50 then that part has to be ignored. Total amount payable is Rs.102 + Rs.102 = Rs.204.
Whether the rounding off provision applies to Pre–deposit?
Yes, any amount payable under the act is subject to rounding off provisions. Hence, even Pre–Deposit is rounded off as per the above Section.
If the assessee has raised multiple invoices, then the rounding off is to be made for the consolidated amount of tax or for the tax amount mentioned in each invoice?
Rounding off must be made for the tax payable under the Act. It applies to each invoice as tax is payable on each invoice. Further, the rounding off must be made for each part of tax (CGST and SGST separately).
MCQs
Q1. If the amount of tax is Rs.2,15,235.50, then the amount shall be rounded off as:
(a) 2,15,236
(b) 2,15,235
(c) 2,15,235.50
(d) 2,15,240
Ans. (a) 2,15,236
Q2. What are the amounts that can be rounded off as per this Section?
(a) Interest
(b) Tax
(c) Penalty
(d) All of the above
Ans: (d) All of the above
Q3. Which of the following shall be rounded off?
(a) CGST
(b) SGST
(c) Both
(d) None of the above
Ans: (c) Both
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