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The effective implementation of the new indirect taxation law i.e. GST requires stringent action against the offenders of the tax. To promote compliance with India’s new general sales tax regime, the state has come up with three important approaches: Prosecution, Interest and monetary penalties. In this blog we will discuss the penalties and prosecution provided under the Central Goods and Services Tax Act, 2017 for the non filling returns of GST.
As per Section 46 of the CGST Act, 2017 any notice in FORM GSTR-3A is issued, to any registered person who is unsuccessful to file an annual return requiring them to provide such return within 15 days. Further, Section 62 offers assessment for non-filing of GST return of registered persons who fail to provide an annual return.
The following are the guidelines prescribed by the CGST Act:
After the completion of the 15 days of the notice, the prescribed authority will proceed to assess the tax liability by taking into consideration all the relevant information and issue an order in the prescribed form. The authority is obligatory to upload the summary in the prescribed Form.
If any offense is committed under the GST Act then the penalty will have to be paid as prescribed under the CGST Act, 2017. The late filing of the returns may attract a penalty called a late fee. This fee can be up to 100 per day as per the act. The state GST will charge 100 and the central GST will charge it own 100 which make it total of Rs. 200/-day. The maximum penalty can be of Rs. 5000/-. However, there is no late fee of the IGST in the matter related to delay filling.
Alongside the late fees, the total interest has to be paid is at 18% per annum. It has to be considered by the tax payer on the tax to be paid. The period of time will start from the next day of filing to the date of payment.
If any individual does not file any GST return to the prescribed authority, then the subsequent returns cannot be filled. For instance, if the general sales tax return -2 has not been filled to the authorities then the next return GSTR-3 and the subsequent return cannot be filled. Hence, the non filling of the return of GST has a cascading effect; this can lead to heavier penalties and fines.
Under the following condition the GST registration can be canceled are:
There are many offenses that will lead to either the confiscation of goods or conveyances or a penalty. The penalty will be amount to 10,000 rupees or a sum equal to the tax evaded.
These offenses are mentioned below:
The Confederation of All India Traders (CAIT) stated that the elevated penalties will guarantee that the taxes collected by the merchant will not be used for the financial benefit or working capital of the companies. This should result in a more stable administration and tax collection.
The following are the cases where the fine and imprisonment will be applicable:
Read our article:GST Returns: Types and their Due dates