178.            Discuss the penalty if the average turnover of A exceed Rs.20 lakh on 7.7.2017 and he registered himself on 25.9.2017. He was granted registration certificate with effect from 25.9.2017. The applicant alleged that since certificate is granted from 25.9.2017, so he is not liable to pay tax for the period between 7.7.2017 to 25.9.2017 under rule 10 (3) Registration Rules.

As per section 22, the applicant claiming registration after 30 days of date of liable to be registered shall not be able to claim ITC but liable to pay tax interest and penalty for such period from date of liable to be registered till date of grant of registration certificate and therefore liable to pay penalty Rs.10,000 under section 122(1).