Chapter XIX - Offences and penalties
Section 122B
Section 122B: Penalty for failure to comply with track and trace mechanism
A person covered by section 148A(1)(b) may face an additional penalty for violating the applicable track-and-trace mechanism.
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Need advice on Section 122B?
This article is for general information. Refer to the Central Goods and Services Tax Act, 2017 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
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.
Key takeaways
Coverage gate
Identify whether section 148A and its operative mechanism apply to the person and goods; do not assume universal coverage.
Penalty formula
For a covered contravention, the amount is the higher of one lakh rupees and ten per cent of tax payable on the goods.
Additional nature
The amount is in addition to a penalty under Chapter XV or this penalty chapter where independently applicable.
Coverage gate
Identify whether section 148A and its operative mechanism apply to the person and goods; do not assume universal coverage.
Penalty formula
For a covered contravention, the amount is the higher of one lakh rupees and ten per cent of tax payable on the goods.
Additional nature
The amount is in addition to a penalty under Chapter XV or this penalty chapter where independently applicable.
Practical checklist
Do
- Verify section 148A application and relevant notification.
- Document the precise traceability failure.
- Calculate both statutory figures and identify any separate penalty basis.
Frequently asked questions
Is the ten-per-cent figure always the amount due?
No. Section 122B chooses the higher of that figure and one lakh rupees.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026