(1) Any offence under this Act may, either before or after the institution of prosecution, be compounded by the Commissioner on payment, by the person accused of the offence, to the Central Government or the State Government, as the case may be, of such compounding amount in such manner as may be prescribed:
Provided that nothing contained in this section shall apply to---
1[(a) a person who has been allowed to compound once in respect of any of the offences specified in clauses (a) to (f), (h), (i) and (l) of sub-section (1) of section 132;]
2* * * * *
3[(c) a person who has been accused of committing an offence under clause (b) of sub-section (1) of section 132;]
(d) a person who has been convicted for an offence under this Act by a court;
4* * * * *
(f) any other class of persons or offences as may be prescribed:
Provided further that any compounding allowed under the provisions of this section shall not affect the proceedings, if any, instituted under any other law:
Provided also that compounding shall be allowed only after making payment of tax, interest and penalty involved in such offences.
(2) The amount for compounding of offences under this section shall be such as may be prescribed, subject to the minimum amount not being less than 5[twenty-five per cent. of the tax involved and the maximum amount not being more than one hundred per cent. of the tax involved].
(3) On payment of such compounding amount as may be determined by the Commissioner, no further proceedings shall be initiated under this Act against the accused person in respect of the same offence and any criminal proceedings, if already initiated in respect of the said offence, shall stand abated.
Provided that nothing contained in this section shall apply to---
1[(a) a person who has been allowed to compound once in respect of any of the offences specified in clauses (a) to (f), (h), (i) and (l) of sub-section (1) of section 132;]
2* * * * *
3[(c) a person who has been accused of committing an offence under clause (b) of sub-section (1) of section 132;]
(d) a person who has been convicted for an offence under this Act by a court;
4* * * * *
(f) any other class of persons or offences as may be prescribed:
Provided further that any compounding allowed under the provisions of this section shall not affect the proceedings, if any, instituted under any other law:
Provided also that compounding shall be allowed only after making payment of tax, interest and penalty involved in such offences.
(2) The amount for compounding of offences under this section shall be such as may be prescribed, subject to the minimum amount not being less than 5[twenty-five per cent. of the tax involved and the maximum amount not being more than one hundred per cent. of the tax involved].
(3) On payment of such compounding amount as may be determined by the Commissioner, no further proceedings shall be initiated under this Act against the accused person in respect of the same offence and any criminal proceedings, if already initiated in respect of the said offence, shall stand abated.
Source footnotes
1. Subs. by Act 8 of 2023, s. 157, for clause (a) (w.e.f. 1-10-2023).2. Cl (b) omitted by Act 8 of 2023, s. 157, (w.e.f. 1-10-2023).
3. Subs. by s. 157, ibid., for clause (c) (w.e.f. 1-10-2023).
4. Cl (e) omitted by s. 157,ibid. (w.e.f. 1-10-2023).
5. Subs. by s. 157, ibid., for certain words (w.e.f. 1-10-2023).
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More sections of this act
Section 1 · Short title, extent and commencement.Section 2 · Definitions.Section 3 · Officers under this Act.Section 4 · Appointment of officers.Section 5 · Powers of officers.Section 6 · Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances.Section 7 · Scope of supply.Section 8 · Tax liability on composite and mixed supplies.India Code, Government of India. Text fetched 10 Oct 2026. Source metadata reports last modification: 2019-11-29. Check the linked official text and subsequent notifications when applying a provision.