Non-compliance with GST regulations can lead to various penalties and consequences. It is crucial for businesses and taxpayers to adhere to GST rules to avoid legal repercussions. Here are the penalties that can be imposed for non-compliance:
- Late Filing of GST Returns: If a registered taxpayer fails to file their GST returns within the prescribed due dates, they are liable to pay a late fee. The late fee is Rs. 50 per day for each CGST and SGST return and Rs. 100 per day for each IGST return. The maximum late fee is capped at Rs. 5,000 per return.
- Incorrect or Missing Information: Providing inaccurate or incomplete information while filing GST returns can attract penalties. The penalty for such errors is Rs. 10,000 or 10% of the tax amount, whichever is higher.
- Fraudulent Tax Evasion: Engaging in fraudulent activities to evade taxes can lead to severe penalties and legal action. The penalty for tax evasion can be up to 100% of the tax evaded.
- Failure to Register for GST: If a taxpayer is required to register for GST but fails to do so, they can be liable to pay a penalty. The penalty can be 10% of the tax due or Rs. 10,000, whichever is higher.
- Not Issuing GST Invoices: Businesses are required to issue GST-compliant invoices for their supplies. Failure to issue proper GST invoices can result in a penalty of up to Rs. 25,000.
- Non-Payment of GST: If a registered taxpayer collects GST from their customers but fails to remit the tax to the government, they may face penalties, including interest on the outstanding tax amount.
- Wrongfully Availing Input Tax Credit (ITC): Claiming ITC on ineligible purchases or without proper supporting documents can lead to penalties. The penalty can be 10% of the ITC claimed or Rs. 10,000, whichever is higher.
- Failure to Display GSTIN: Registered businesses are required to prominently display their GSTIN at their place of business. Failure to do so can attract a penalty of up to Rs. 25,000.
- Not Issuing Receipts: Businesses are required to issue proper GST-compliant receipts for every transaction. Failure to issue receipts can lead to a penalty of up to Rs. 5,000.
- Non-Compliance with GST Rules: Any non-compliance with GST rules and regulations, including maintaining proper books of accounts and records, can result in penalties.
It is essential for businesses and taxpayers to be aware of the GST compliance requirements and ensure timely and accurate filing of returns. Maintaining proper records, issuing correct invoices, and complying with GST provisions can help businesses avoid penalties and maintain a good reputation in the market.
Remember, the penalties mentioned above can vary depending on the severity of the non-compliance and the discretion of the tax authorities. Therefore, it is advisable to seek professional advice and ensure full compliance with GST laws to avoid penalties and legal hassles.