GST Filing Penalties and How to Avoid Them

Posted In | Finance | Accounting Software | India Accounting Tax

The Goods and Services Tax (GST) is a comprehensive indirect tax on the sale, manufacture, and consumption of goods and services throughout India. The primary objective of GST is to consolidate multiple indirect taxes into a single tax, excluding taxes for local bodies. However, non-compliance with GST regulations can lead to hefty penalties. This article will explore the various penalties associated with GST filing and how you can avoid them.
 

Penalties in GST

Non-compliance with GST regulations can lead to various penalties and late fees. Here are some of the penalties that you can incur:
 

• Late fee for not filing returns on time: If you fail to file your GST returns on time, you will be liable to pay a late fee of INR 100 per day per act up to a maximum of INR 5000. This is applicable for every day that the default continues.
   
• Penalty for not registering under GST: If you are required to register under GST but fail to do so, you can be penalized with 10% of the amount of tax due or INR 10,000, whichever is higher.
   
• Penalty for incorrect invoicing: In case you issue an incorrect invoice, or fail to issue an invoice in accordance with the provisions of GST, a penalty of INR 25,000 can be levied.
   
• Penalty for not issuing an invoice: If you fail to issue an invoice, you can be levied a penalty of up to INR 25,000.
   

How to Avoid GST Penalties

Avoiding GST penalties is not difficult if you comply with all the GST regulations diligently. Here are some tips to help you avoid GST penalties:
 

• Timely filing of GST returns: One of the most common reasons for penalties is the late filing of GST returns. Ensure you file your returns on time to avoid these penalties.
   
• Correct invoicing: Incorrect invoicing can lead to penalties. Make sure all your invoices are correct and issued in accordance with the provisions of GST.
   
• Register under GST: If you are required to register under GST, ensure you do so. Not registering under GST when required can lead to penalties.
   
• Stay informed: GST regulations can change. Stay informed about the latest changes to avoid non-compliance.
   

Being aware of the GST regulations and ensuring full compliance can help you avoid penalties. Consult with a professional if you are unsure about the GST regulations and procedures to ensure that you are fully compliant.