OFFENCES AND PENALTIESCentral

Section 18 of The Health Security Se National Security Cess Act, 2025

(1)Where a taxable person who---
1. (a)owns, operates *or is in control of any machine or process for the purpose of manufacture or production of the specified goods without declaring to the proper officer under this Act; or
2. (b)fails to pay the cess levied under section 4 beyond a period of three months from the date on which such payment becomes due under section 10; or
3. (c)fails to furnish returns as required under section 10 or falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information or declaration or return with an intention to evade payment of cess due under the said section; or
4. (d)fraudulently obtains refund of cess; or
5. (e)obstructs or prevents any officer in discharge of his duties under this Act; or
6. (f)is liable to be registered under this Act but fails to obtain registration; or
7. (g)fails to furnish information or documents called for by an officer in accordance with the provisions of this Act or the rules made thereunder, or furnishes false information or documents during any proceedings under this Act; or
8. (h)tampers with, or destroys any material evidence or document; or
  1. (i)disposes of or tampers with any goods that have been seized under this Act, the proper officer may, after making such inquiry as he deems fit, impose on such taxable person in addition to the cess leviable, a penalty of ten thousand rupees or an amount equivalent to the cess payable or cess sought to be evaded, or the refund claimed fraudulently, whichever is higher.
(2)Any person who aids or abets any of the contraventions specified in clauses (a) to (i) of sub-section (1) shall be liable to a penalty which may extend to one hundred thousand rupees.
(3)Any order imposing any such penalty shall be passed by the proper officer only after giving the taxable person a reasonable opportunity of being heard.

Summary

(1) Where a taxable person who– (a) owns, operates *or is in control of any machine or process for the purpose of manufacture or production of the specified goods without declaring to the proper officer under this Act; or (b) fails to pay the cess levied under section 4 beyond a period of three.

Practical examples

1Deepak runs a factory with a packing machine that he does not declare to the tax authorities. The tax officer discovers this undeclared machine. The proper officer holds an inquiry and gives Deepak a chance to speak. The officer then orders Deepak to pay a penalty of ten thousand rupees, as this is higher than the tax he avoided.

2Vikram helps his friend hide some seized pan masala goods from a tax storehouse. This is considered aiding and abetting a tax offence. For this act of assistance, Vikram faces a personal penalty of up to one hundred thousand rupees under the health cess law.

FAQ

1. What is the minimum penalty for not declaring a machine under Section 18 of the Health Security se National Security Cess Act, 2025?

Under Section 18 of the Health Security se National Security Cess Act, 2025, the minimum penalty is ten thousand rupees, or an amount equivalent to the cess payable or evaded, whichever is higher.

2. Can a person who helps someone evade the health tax be penalised under Section 18 of the national security cess law?

Yes, under Section 18 of the Health Security se National Security Cess Act, 2025, any person who aids or abets any listed tax violation is liable to a penalty that can go up to one hundred thousand rupees.

3. Must a taxpayer be given a hearing before a penalty is imposed under Section 18 of the Health Security se National Security Cess Act, 2025?

Yes, under Section 18 of the Health Security se National Security Cess Act, 2025, any order imposing a penalty can only be passed after giving the taxable person a reasonable opportunity of being heard.

4. What happens under Section 18 of the Health Security se National Security Cess Act, 2025 if a person fails to pay the health tax for more than three months?

Under Section 18 of the Health Security se National Security Cess Act, 2025, if a person fails to pay the cess beyond three months from its due date, they face a penalty of ten thousand rupees or the amount of cess due, whichever is higher.

Test yourself

Q1.Under Section 18 of the Health Security se National Security Cess Act, 2025, what is the maximum penalty that can be imposed on someone who aids or abets a listed violation?

Q2.Under Section 18 of the Health Security se National Security Cess Act, 2025, what is the minimum standard penalty for a direct violator, such as someone who fails to register or destroys evidence?

Q3.Under Section 18 of the Health Security se National Security Cess Act, 2025, failure to pay cess triggers a penalty if the payment remains unpaid beyond what time period from its due date?

Q4.Under Section 18 and Section 14 of the Health Security se National Security Cess Act, 2025, if a factory owner physically bars an authorised officer from entering the premises to inspect books, which penalty can the proper officer impose?

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