What is the penalty for not Filing GST Return?

Goods and Services Tax (GST) is an indirect tax levied by the government of India on the supply of goods and services. Under GST, all registered businesses are required to file GST returns on a regular basis, which details the transactions made during a specific period.

However, many businesses fail to file their GST returns on time, which can lead to penalties and consequences. In this blog post, we will discuss the penalties for not filing GST returns.

The penalty for not filing GST returns is twofold. Firstly, the taxpayer is liable to pay a late fee of Rs. 100 per day per Act, i.e., Rs. 100 under CGST and Rs. 100 under SGST, subject to a maximum of Rs. 5,000. This late fee applies even if there is no tax liability for the taxpayer in a particular month. Additionally, if the taxpayer is required to file an annual return, then they will be subject to a late fee of Rs. 200 per day, subject to a maximum of 0.25% of their annual turnover.

Secondly, if the taxpayer fails to file GST returns for a continuous period of six months or more, then they will be subject to a penalty of 10% of the tax due or Rs. 10,000, whichever is higher. This penalty will apply to each Act, i.e., CGST and SGST, making the total penalty 20% of the tax due. Furthermore, if the taxpayer continues to not file GST returns for an additional month, then they will be subject to an additional penalty of Rs. 50 per day under each Act.

In addition to the financial penalties, there are other consequences of not filing GST returns. For instance, the taxpayer's GST registration may be canceled, and they may be barred from obtaining future GST registrations. Additionally, the taxpayer may not be able to claim input tax credit (ITC) if they have not filed their GST returns on time.

In conclusion, it is essential for businesses to file their GST returns on time to avoid penalties and consequences. By staying compliant with GST regulations, businesses can maintain their reputation and avoid financial losses.