Outreach program on Decriminalization of Fiscal and Tax laws – reg.

Cir(145)/2022                                                                            November 04, 2022




Sub: Outreach program on Decriminalization of Fiscal and Tax laws – reg.


Dear Sirs/Madam,

This is in reference to the Outreach program on Decriminalization of Fiscal and Tax laws held on 3rd November 2022 conducted by the Ease of Doing Business (EODB) Section of the Department for Promotion of Industry and Internal Trade. The meeting was chaired by Shri Vivek Aggarwal, Additional Secretary, Department of Revenue.  The meeting discussed the issue of Decriminalization of economic legislation and highlighted the number of cases initiated for the prosecution during the last 5 years  

  • Income Tax Act: 9,742 cases
  • Custom Act: 2,559cases
  • GST Law: 284 cases

The meeting concluded that the Department of Revenue has reviewed all provisions thoroughly to identify any overlap with offenses punishable under IPC and also studied the threshold for triggering prosecution and informed about the below-given action taken so far:

Income Tax Act 

  • Section 276AB has been sunset from April 2022
  • Section 276A is under review by the Government
  • Revised the list of offenses that can be made compoundable by revising the guidelines on the compounding of Income Tax Act 1961
  • Increased timeline for filing compounding application till 36 months from the present limit of 24 months
  • Reduced interest charges for delayed payment of compounding charges from 2% to 1% per month for within 3 months and 3% to 2% per month beyond 3 months
  • Persons convicted with up to 2 years of imprisonment are allowed to seek compounding

Customs Act 

  • Removed the element of subjectivity in the procedure in terms of the requirement of the satisfaction of the compounding authority
  • An offense under section 135AA has been made compoundable
  • Enhanced monetary thresholds for launching prosecution for the importation of baggage/smuggling cases from Rs 20 lakhs to Rs 50 lakhs and commercial fraud cases from Rs 1 cr to Rs 2 cr.


GST Act 

  • The threshold for initiating prosecution which is currently Rs 1 crore is being reviewed by the GST council
  • Compounding is provided for all offenses subject to payment of the specified amount
  • The specified amount for compounding is currently between 50% to 150% of the tax involved and is being reviewed by the GST council

This is for information of the members. DoR intends to continue such stakeholder engagement to further ease the process. In this regard, if the members have any suggestions, the same may be shared with CITI for necessary action towards EoDB.

Thanking you,

Yours faithfully,


Chandrima Chatterjee

Secretary General