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Section 122B of the CGST Act, 2017

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GST›CGST Act, 2017›Chapter XIX, Offences and Penalties

At a glance

Entitlement and conditions

122BFor a person specified in section 148A(1)(b), contravention attracts the higher of one lakh rupees and ten per cent of tax on the goods, notwithstanding the Act and in addition to other Chapter XV or penalty-Chapter penalties.

Procedure, powers and definitions

122BThe law does not settle whose tax liability supplies the measure, when it is measured, or whether contravention includes failure to perform the positive duties.

A person covered by the track and trace mechanism faces an additional penalty for contravening section 148A. The amount is the higher of one lakh rupees and ten per cent of tax on the goods. The rule overrides contrary provisions of the Act and supplements other penalties. It took effect on 1 October 2025.^[1]

Quick facts

Section 122B, CGST Act, 2017

Penalty for failure to comply with track and trace mechanism

Provision
Act	Central Goods and Services Tax Act, 2017
Chapter	XIX, Offences and Penalties
Section title	Penalty for failure to comply with track and trace mechanism
Amendments
Last amendment	1 October 2025: inserted the whole of section 122B, heading and operative words together (section 131 of the Finance (No. 7) Act, 2025)
Amendments	1 footnote in the CBIC text (table)
Related provisions
Sections	148A
Structure footnote 1Whether the section reaches the act under test the words "any person referred to in clause (b) of sub-section (1) of section 148A"The person the section reaches the contravention limbContravention of the provisions of section 148A the non obstante clauseThe overriding effect the words “in addition to”The penalty in addition to any other the quantum limbThe amount of the penalty
Source
Law text	CBIC tax information portal, served on 17 September 2026^[1]
Questions reviewed	Prashant Prakash, 22 September 2026

Text

The text below is the section as served by the CBIC tax information portal on 17 September 2026, with the portal's own amendment footnote markers (shown as small numerals before a bracket) and its footnotes.^[1] The Act as published in the Gazette of India is the legal source.

Section 122B, verbatim (show)

Section 122B

¹[Section 122B. Penalty for failure to comply with track and trace mechanism.-

Notwithstanding anything contained in this Act, where any person referred to in clause (b) of sub-section (1) of section 148A acts in contravention of the provisions of the said section, he shall, in addition to any penalty under Chapter XV or the provisions of this Chapter, be liable to pay a penalty equal to an amount of one lakh rupees or ten per cent. of the tax payable on such goods, whichever is higher.]

1. Inserted (w.e.f. 01.10.2025) by section 131 of the Finance (No. 7) Act, 2025.

Questions to answer on the file

Questions a reviewer answers from the engagement file, grouped by the part of the section they come from. They describe what the section asks; they do not decide it.

Scope the section as a whole

Questions to answer on the file2 questions

Does the matter concern a penalty under section 122B?
What does the matter turn on?

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Whether the section reaches the act under test footnote 1

Questions to answer on the file2 questions

On what date did the act said to contravene section 148A take place?
Did the act take place on or after 1 October 2025?

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The person the section reaches the words "any person referred to in clause (b) of sub-section (1) of section 148A"

Questions to answer on the file4 questions

Is the person one referred to in clause (b) of sub-section (1) of section 148A?
Has the Government specified, by notification under sub-section (1) of section 148A, the goods and the persons to which that section applies?
Is the person one in possession of, or one who deals with, the goods so specified?
Is the person on whom the penalty is proposed or levied the same person as the one said to be referred to in that clause?

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Contravention of the provisions of section 148A the contravention limb

Questions to answer on the file4 questions

Has the person acted in contravention of the provisions of section 148A?
Is the provision said to be contravened a provision of section 148A rather than of another section?
Which requirement in sub-section (3) of section 148A is said to have been contravened?
Does the default consist of not doing what section 148A requires, rather than of doing what it forbids?

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The overriding effect the non obstante clause

Questions to answer on the file1 question

Is any other provision of this Act relied on to displace or to reduce the penalty under section 122B?

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The penalty in addition to any other the words “in addition to”

Questions to answer on the file3 questions

Has any other penalty been proposed or levied on the same person for the same matter?
If so: under which of the two does that other penalty fall: Chapter XV or the provisions of this Chapter?
Has the penalty under section 122B been reduced or set off against that other penalty?

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The amount of the penalty the quantum limb

Questions to answer on the file5 questions

What is the tax payable on such goods?
Have the goods on which the tax payable is to be measured been on the file?
What is ten per cent of the tax payable on such goods?
Is ten per cent of the tax payable on such goods higher than one lakh rupees?
What amount of penalty under section 122B has been proposed or levied?

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Amendment history

The CBIC text carries 1 footnote. The table gives each in the source's own terms. Effective dates are as the footnotes state them.^[1]

Amendments to section 122b as footnoted in the CBIC text
Note	Change	Instrument	Effective from
1	inserted the whole of section 122B, heading and operative words together	section 131 of the Finance (No. 7) Act, 2025^[2]	w.e.f. 01.10.2025

Provisions connected to Section 122B
Provision	Connection	Words that tie them
Section 148A	this provision requires Section 148A	"where any person referred to in clause (b) of sub-section (1) of section 148A acts in contravention of the provisions of the said section"
Section 148A	this provision defined by clause (b) of sub-section (1) of Section 148A	148A(1)(b) "persons or class of persons who are in possession or deal with such goods"
Section 148A	clause (b) of sub-section (1) of Section 148A prescribed by a notification of the Government on the recommendations of the Council	148A(1) "The Government may, on the recommendations of the Council, by notification, specify"
Section 148A	"the provisions of the said section" in 122B defined by sub-section (3) of Section 148A	148A(3) "The persons referred to in sub-section (1), shall,-- (a) affix... (b) furnish... (c) furnish... (d) pay"

Circulars and notifications

No circular or notification in the CBIC repository is recorded as citing this section.

Unsettled questions

The words of section 122b do not answer these questions. Where one decides a matter on the file, the answer depends on the position taken on it.

Whose tax payable on "such goods" is measured, and at what date? Reading section 148A(1)(a) supplies the goods, but section 122B still does not say whose liability on them is taken or when it is struck.
Does "acts in contravention of the provisions of the said section" reach a failure to do what section 148A(3) requires, or only the doing of something it forbids? Every duty in 148A(3) is a positive one, so on the narrower reading the section would penalise almost nothing.

See also

Section 148A of the CGST Act, 2017: track and trace mechanism for certain goods

References

Central Board of Indirect Taxes and Customs. "Section 122B. Penalty for failure to comply with track and trace mechanism". Central Goods and Services Tax Act, 2017, CBIC tax information portal, with amendment footnotes 1 to 1. Retrieved 17 September 2026.
The Finance (No. 7) Act, 2025. Cited in CBIC footnote 1.

External links

CGST Act, 2017, Section 122B on the CBIC tax information portal