Filing Application for Compounding of Offence (Form GST CPD-01) & Actions in Subsequent Proceedings

Edition: September 2025
Disclaimer: This manual is for compliance facilitation. It does not substitute statutory provisions, notifications, or circulars. Taxpayers must verify with the CGST/SGST Acts, Rules, and GSTN updates.

✍️ Preface

A taxpayer facing prosecution under GST law can seek settlement of the offence through compounding by filing Form GST CPD-01. Compounding provides relief from prolonged prosecution upon payment of compounding fees and compliance with prescribed conditions. This report explains the legal basis, filing process, reply/rectification procedure, FAQs, and a compliance checklist.

⚖️ 1. Law Basis

• Section 138, CGST Act, 2017 – Compounding of offences.

• Rule 162, CGST Rules, 2017 – Procedure for compounding.

• Section 132, CGST Act, 2017 – Offences which may be subject to prosecution.

🛠️ 2. Step-by-Step Process to File & Manage Compounding Application

A. File Application (Form GST CPD-01)

1. Login at www.gst.gov.in → Dashboard → Services > User Services > My Applications.

2. Select Application Type = Compounding Application → Click New Application.

3. Enter prosecution details (Notice No./Order Reference, Violation type, Amount of evasion, Period of offence).

4. Confirm first offence status, proceedings under other laws, upload documents (optional).

5. Preview, verify, and Submit with DSC/EVC.

6. ARN generated → Application status = Compounding Application Submitted.

B. Case Management in “My Applications”

• Use tabs on Case Details screen:

  • Applications tab → View filed application.

  • Notices tab → View or reply to notices (hearing/adjournment).

  • Replies tab → File replies/counter-replies.

  • Orders tab → View order, pay compounding fee, or initiate rectification.

  • Rectification tab → File/view rectification requests.

C. Payment of Compounding Fee

• Pay within 30 days of order via cash ledger only.

• Status updated to Compounding Fee paid.

D. Rectification

• Rectification allowed within 3 months (extendable up to 6 months, except for clerical errors).

📌 3. Monitoring Status of ARN

During proceedings, ARN status may show:

• Compounding Application Submitted

• Hearing notice issued

• Reply submitted / Adjournment granted

• Compounding allowed / Compounding rejected / Compounding withdrawn

• Compounding fee paid

• Rectification request submitted / Rectification order passed / Rectification request rejected

❓ 4. FAQs (with Basis)

Q1. What is Form GST CPD-01?
Application for compounding of offence under Sec. 138, CGST Act.

Q2. Who can file CPD-01?
Any taxpayer facing instituted or contemplated prosecution.

Q3. What happens after filing?
ARN generated, application moved to authority’s queue. Authority may issue hearing/adjournment notices.

Q4. How is the fee paid?
Fee payable only after compounding order is allowed. Must be paid within 30 days via cash ledger.

Q5. Can compounding be withdrawn?
Yes, if authority finds concealment or false evidence.

Q6. Can orders be rectified?
Yes, within 3 months (extendable up to 6 months) for substantive errors; no time bar for clerical errors.

✅ 5. Compliance Checklist