Failure to obtain registrations, failure to pay the tax, failure to furnish the prescribed returns, suppression of the correct value of the taxable services and failure to comply with notice attract penal provisions. But, it is specifically provided that no penalty is imposable on the assessee for any of the above failures, if the assessee proves that there was reasonable cause for the failure. Provisions, under sections 87 to 93 of the Finance Act, 1994, were also provided for prosecution of offenders. However, these provisions were subsequently withdrawn.
Note : This duty has been subsumed in the CGST after the introduction of GST w.e.f. 01-07-2017.