Penalty Upto Rs. 1 Lakh Can be Imposed If GST Nil Returns Not Filed on Time
A taxpayer got a GSTIN in November 2020 and applied for the GST registration, but did not do any business – no sales, no purchases, nothing.
Because of no activity, the taxpayer didn’t file any GST returns like GSTR-3B.
The GST department cancelled the GST registration on its own in September 2021 due to non-filing of returns.
GST Registration Cancelled in 2021
- As no transactions were done, all returns would have been filed “Nil”.
- The GST department, on its own choice, cancelled the GST registration in September 2021.
Still Penalty of Rs. 110000 Will be Charged
- GSTR-3B is a return that is required to be filed every month, even if no transactions are made.
- A late fee will be automatically calculated if the taxpayer does not file GSTR-3B within the time period of 10 months.
Late Fee Applicable If GSTR-3B Return Not Submitted On Time
- Normal Return: Rs. 50 per day (Rs. 25 CGST + Rs. 25 SGST).
- Nil Return: Rs. 20 per day (Rs. 10 CGST + Rs. 10 SGST).
- Maximum: Rs. 10,000 per return (Rs. 5,000 CGST + Rs. 5,000 SGST).
System Computed For Filing Returns from Nov 2020
- Rs. 10,000 late fee per month
- Rs. 10,000 × 10 months = Rs. 1,00,000
Late Fee Applicable If Unable to Submit GSTR-10
If your GST registration is cancelled or surrendered, you must file a final return called GSTR-10.
You need to file this return within the time period of 90 days from the later of these two dates: The date your GST was cancelled or the date you received the cancellation order.
- Late fee: Rs. 200 per day (CGST Rs. 100 + SGST Rs. 100)
- Maximum penalty: Rs. 10,000
Total Late Fee:
- GSTR-3B not filed (10 months): 10,000/month × 10 = Rs. 1,00,000
- GSTR-10 not filed in 90 days: Rs. 200/day capped at Rs. 10,000
Key Points to Keep in Mind
- Always file GSTR-3B monthly, even with no business. Means NIL returns on time.
- If the business is inactive, cancel the GSTIN voluntarily – don’t wait for the GST department to cancel it. Cancel it from your side.
- After cancellation, file GSTR-10 within 90 days to avoid a penalty of Rs. 200 per day.
