Compounding of offences
Commencement. 22nd June, 2017 for sections 1, 2, 3, 4, 5, 10, 22, 23, 24, 25, 26, 27, 28, 29, 30, 139, 146 and 164 1st July, 2017 for sections 6 to 9, 11 to 21, 31 to 41, 42 (except proviso to sub-section (9) of S 42), 43 (except proviso to subsection (9) of S 43), 44 to 50, 53 to 138, 140 to 163, 165 to 174.
Section 138 of the Central Goods and Services Tax Act, 2017 deals with compounding of offences. 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 prescr The Act was enacted on 12 Apr 2017.
(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.
Section 138, The Central Goods and Services Tax Act, 2017 (Act 12 of 2017).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Referred to by 1
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Shravan A. Mehra v. Superintendent of Central Tax
Court's Decision & Legal Precedent
Final Order text dated 19.02.2019 matches index (order-1.pdf): While granting anticipatory bail in a s.132 fake-invoice probe, Court extracted and applied s.138 compounding — offences under the Act are compoundable with the Commissioner, signalling legislative preference for compounding over purely punitive approach; bail granted with stringent conditions.
On this section: s.138 compounding availability weighed as a factor showing offences are compoundable with the Commissioner before/after prosecution.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Made under this section, and citing it
1 instrument states that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
Questions about Section 138
What have the courts held on Section 138 of the Central Goods and Services Tax Act?
Shravan A. Mehra v. Superintendent of Central Tax (19 Feb 2019) is the leading judgment on this section among those set out below: s.138 compounding availability weighed as a factor showing offences are compoundable with the Commissioner before/after prosecution.
How do I find court cases under Section 138 of the Central Goods and Services Tax Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: CGST Act 138, section 138 CGST Act, section 138 of the Central Goods and Services Tax Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with Shravan A. Mehra v. Superintendent of Central Tax (19 Feb 2019).
What should I read with Section 138 of the Central Goods and Services Tax Act, and has it changed?
Its own text turns on section 132 (Punishment for certain offences), so none of them can safely be read on its own. 1 other provision in this corpus refers back to it. The rules and notifications made under it are where it actually bites, and there is one: most recently Notification No. 09/2017 – Central Tax dated 28.06.2017 (2017).
When was Section 138 of the Central Goods and Services Tax Act enacted?
Section 138 of the Central Goods and Services Tax Act, cited as CGST Act 138, was enacted on 12 Apr 2017 as Act 12 of 2017. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions5109 words
- 142. Miscellaneous transitional provisions1966 words
- 140. Transitional arrangements for input tax credit1883 words
- 54. Refund of tax1858 words
- 110. President and Members of Appellate Tribunal, their qualification, appointment, conditions of service, etc1647 words
- 74A. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason pertaining to Financial Year 2024-25 onward1299 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.