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Penalty for Late Filing of GST Return


Penalty for Late Filing of GST Return

GST return filing is mandatory for all persons having GST registration irrespective of turnover or profit. Hence, taxpayers even with no business activity or turnover in a month but registered with GST should file GST returns. Regular taxpayers shall file monthly GST returns and dealers registered under Composition Scheme shall file quarterly GST returns. However, any non-resident taxable persons shall file one return every month. In this article, we look at the penalty for late filing of GST return.

GST Return Forms

  • GSTR-1, GSTR-3B, GSTR-5, GSTR-5A, GSTR-6, GSTR-7 & GSTR-8 has to be filed monthly basis with different due dates.
  • GSTR-4, GST-ITC-4 filed quarterly
  • GSTR-9, GSTR-9A, GSTR-9B & GSTR-9C are to be filed annually
  • The taxpayer should file GSTR-10 within 3 months from the date of cancellation

Penalty for late filing of GST return

Due to the technical issues and frequent amendment of GST clauses, the CBIC has reduced the penalty amount as follows:

  • Intra-state supplies – Monthly Filing: CGST of Rs.25 per day + SGST of Rs.25 per day, totaling Rs.50 per day
  • Inter-state supplies – Monthly Filing: IGST of Rs.50 per day

NIL return

  • Intra-state supplies – Monthly Filing: CGST of Rs.10 per day + SGST of Rs.10 per day, totaling Rs.20 per day
  • Inter-state supplies – Monthly Filing: IGST of Rs.20 per day

Note: The maximum late fees cannot exceed Rs.5,000.

Interest Rate on GSTR

Interest has to be paid by GST-registered member if they fall under below category:

  • Delayed GST payment i.e. paying GST after the due date
  • Claiming excess Input Tax Credit
  • Reducing excess Output Tax Liability

GST has to be paid at the time of filing GSTR-3B every month and GSTR-4 in every quarter.

The interest amount is separately charged for the defaults and GST is not payable on the interest amount. The Interest rates are as follows:

  • 18% if the tax paid after due date
  • 28% if excess ITC Claimed or excess reduction in Output Tax

If GST return for a month is not filed, then the GST return for the next month cannot be filed by the taxpayer. Further, if a taxpayer fails to file GSTR-1 return on the 10th, then the taxpayer would not be able to file GSTR-2 return on the 15th. Hence, late filing of GST return will have a cascading effect leading to heavy fines and penalty.

SOP for Non-filers of GST Returns

The Central Board of Indirect Taxes and Customs (CBIC) has recently issued the Standard Operating Procedures (SOP) to deal with the Non-Filers of GST Returns wide Circular No. 129/48/2019-GST Dated 24-12-2019. This Standard Operating Procedure (SOP) is to be followed by the Tax Authorities in case of Non-filing of GST returns. The current article provides a brief understanding of guidelines issued in the Circular.

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Purpose of SOP

The GST officers follow several steps to take actions against taxpayers for non-compliance of filing tax returns. Hence, to resolve the disparity and to ensure appropriate procedure in the case of non-furnishing of GST returns, the CBIC issued the Standard Operating Procedure across India.

The Circular of Standard Operating Procedure for Non-filers of GST Returns is attached here for reference:


GST Returns Covered Under the SOP

The following types of Goods and Service Tax Returns are covered under the SOP for Non-filers of GST Returns

  • Regular GST Returns covered under Section 39 of Central Goods and Services Tax Act, 2017
  • Annual GST returns covered under Section 44 of CGST Act, 2017
  • Final GST Returns covered Section 45 of the Central Goods and Services Tax Act, 2017

Standard Operating Procedure

The guidelines provided in the SOP for Non-filers of GST Returns are explained in detail below:

Notice to Non-Filer of GST Return

According to these guidelines, Tax Authorities will issue a notice to a registered individual who fails to furnish GST returns as mentioned.

  • This notice will be issued under Section 46 of the CGST Act with Rule 68 of the Central Goods and Services Tax Rules, 2017
  • The notice in Form GSTR-3A will be issued electronically to the Non-filers of GST Returns.

The format of Form GSTR-3A Notice is enclosed here for reference:


File Return

The registered person must file the return within 15 days after issuance of such Form GSTR-3A Notice. If the taxpayers fail to pay return, the tax liability will be assessed. In addition to tax so assessed, the taxpayer will also be liable to pay interest and penalty as per provisions of the CGST Act.

The taxpayer shall pay 18% interest per annum. The rate of interest needs to be deliberated by the taxpayer on the amount of outstanding GST to be paid.

Best Judgment Assessment

As per Section 62 of the CGST Act 2017, the Goods and Service Department shall assess the tax liability when the taxpayer fails to file the returns within the due date. After the assessment, the officer passes the judgement order through ASMT-13. The prescribed officer will assess the tax liability according to the best judgment using the following information.

  • Outward supplies details in the statement provided under the Form GSTR-1
  • The details of supplies auto-populated in the Form GSTR-2A
  • The information available from e-way bills
  • Information from inspection of books of accounts

Note: The CBIC has also notified that the officer will not issue any further notice before starting the assessment and no further communication will be done concerning tax liability determined under Section 62 of the CGST Act, 2017.

Withdrawal of Form GSTR-3A Notice

If the registered person filed the GST return before issuance of the Assessment order, then the taxpayer can consider Form GSTR-3A as invalid. The GST officer shall drop the proceedings if the taxpayer files the return within 30 days from the date of notice issued. The proceedings will be dropped if the return is filed within 30 days of notice of the best judgement assessment.

Recovery of GST

If the taxpayer fails to file the GST returns within 30 days of notice of best judgment assessment, the GST office shall initiate the recovery proceedings against the non-filers. Non-filing of GST returns within 30 days of assessment order may lead to the cancellation of registrations.

General guidelines for non-filers of GST returns

Following are the general guidelines for non-filing of returns:

  • The GST department will send a system-generated message to all the registered taxpayers before three days of due date as a reminder to file the return under Section 39.
  • Once the due date is over, the registered taxpayer will get an auto-generated message stating that the registered person has not filed the regular return
  • The registered taxpayer will get a notice in form GSTR-3A (five days after the due date) to furnish the GST return within 15 days
  • If the person doesn’t file the return within the prescribed date, the GST authority will pass the best judgment assessment order in form GST ASMT-13 based on information like E-way bill, GSTR-2A or any other relevant information.
  • The registered taxpayer gets a final opportunity to furnish the return within 30 days from passing the assessment order if the taxpayer files within the prescribed time, then the order will stand withdrawn.
  • If the taxpayer doesn’t file the return, then the officer will start recovery proceedings under Sections 79 and Section 80 of CGST Act for the recovery of GST registration.

Notice for Not Filing GST Return

If a taxpayer fails to furnish GST returns for more than a month or two, the GST authorities may issue notice through GSTR-3A. Upon receiving the notice through GSTR-3A from the authorities, the taxpayer must file the returns within a period of 15 days. The taxpayer shall file the returns along with the penalty shown in the GST portal. If the taxpayer still fails to file the returns even after receiving the notice, the GST officer shall assess the tax liability and post the required amount along with penalty on the GST portal. The taxpayer shall then pay the tax along with the added fines.

Hence, on receiving GSTR-3A notice, it is advisable for all GST taxpayers to immediately regularise all GST compliance by paying the applicable penalty.

Know more about notice for not filing GST return, GSTR-3A. A sample GSTR-3A notice is provided below for reference:

Sample GSTR-3A
Sample GSTR-3A

Cancellation of GST Registration

If a taxpayer continues to default on filing GST returns, even after receiving notice GSTR-3A, the GST registration can be cancelled. The concerned officer of GST may cancel the GST registration of the taxpayer, upon failing to file monthly returns continuously for six months.

The GST officer can cancel the GST registration of a composition taxable person if the taxpayer fails to file the GST returns continuously for three consecutive tax periods.

After the cancellation of the GST registration, the taxpayer shall pay the required GST tax, penalty and fines as assessed by the GST officer immediately. In addition, GST payment must be made equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock or capital goods or plant and machinery on the day immediately preceding the date of such cancellation or the output tax payable on such goods, whichever is higher.

Before the GST officer cancels the GST registration, the officer provides an opportunity to hear from the taxpayer or the officer may ask to regularize all the GST compliance. Hence, the officer passes the cancellation order through the Form GST REG-17. A sample Form GST REG-17 for reference:

Sample GST REG-17
Sample GST REG-17

Impact on GST Compliance Rating Score

Under GST, all taxpayers will be provided with a compliance rating score based on the track-record of GST return filing, GST payment and other requirements. GST compliance rating score would be published in the public domain or GST portal for all GST taxpayers and can be accessed by anyone. Hence, any business that fails to furnish GST returns or make GST payment on time could be adversely impacted by the GST rating score.

Know more about GST Compliance Rating.