Consequences of GST Non Compliance

September 4, 2019
Consequences of GST Non Compliance

Usually, GST returns comprise of two types of returns – periodic and annual returns. The periodic returns comprise of monthly and quarterly returns, and these are for transactions during the month or the quarter.

The annual return is for reporting the summary of the periodic returns filed during a financial year. Annual GST return has a special significance as it is supposed to be the last return of the year.

Who is required to file an annual return?

It generally covers all the taxpayers, with certain exceptions such as for those taxpayers who have obtained registration as:

“Casual taxable persons” or “Non-resident taxable persons” such as exhibitors

‘Input service distributors’ to distribute the input tax credit of the services that are invoiced in one location are to be used in different states. (For Instance- distribution of input tax credit pertaining to advertisement services invoiced in one state, however, is used in other states)

A person who is liable for deduction of tax at source, the Government has not implemented the deduction of tax at source related provisions.

What is the format of the return?

As per the GST rules, there are various forms that have been prescribed for the purpose of return, and it evidently depends on the category of the taxpayers.

Category of the taxpayer

Return (GSTR) form

Composition of Scheme Registered


E-Com operator deducting tax


Others where turnover (for all states put together) exceeds INR 2 Crore


Others where turnover is less than INR 2 Crore



The Government has recently suspended filings such as GSTR 2 and GSTR 3 and comes up with a more simplified summary return GSTR 3B. Currently, the efforts are underway to finalize the contents of the annual return with the dual purpose of achieving simplicity and comprehensiveness. The recent format was supposed to be taken up during the last council meeting on 31st July; however, no action has been taken then. Once the committee approves the format, then the same can be taken up for the stakeholder consultation.

Deadline for filing the return

Both normal and composition tax players are required to file GST annual returns for the financial year 2017-18 in GSTR 9/9A/9C (as applicable) on or before 31st August, 2019.

Consequences of non-payment

As the deadline approaches fast, The Tirupati GST Commissionerate has cautioned the public about the perils of non-payment.

  • Failure to file an annual return shall attract a late fee of INR 200 per day during the period of failure, subject to a maximum of 0.25% of the said financial year’s turnover.
  • If you don’t file any GST return, then subsequent returns can’t be filed. Hence late filing of GST return will have a cascading effect leading to heavy fines and penalty.
  • There is a provision of the late filing also. Late filing attracts penalty called late fee. The late fee is Rs.100 per day per act. Thus it is 100 under CGST and 100 under SGST, hence a total of 200 per day. The maximum is Rs 5000 per day.
  • There is no late fee on IGST in case of delayed filing. Along with the late fee, interest has to be paid at 18% per annum. It has to be calculated by the taxpayer on the tax to be paid. The time period will be from the next day of filing to the date of payment.

Always remember that GST non-compliance can attract penalties and imprisonment. The GST law is out with some clear instructions that must be adhered to. To keep tax evasion at bay, GST has come out with some stringent action against offenders. Some offenses will lead to both penalty and seizure of goods. These may include:

  • Failing to account for goods, for which the person is accountable to pay tax
  • Sending or receiving goods by breaching rules to avoid tax
  • Providing goods/services which are not registered and taxable
  • Using a medium to transport and deliver taxable goods by breaching the rules.

Period of Imprisonment 

The period of imprisonment depends on the type of offense and the amount of tax evaded.

If the offense committed exceeds Rs 500 Lakhs, to avoid tax, then the imprisonment duration is five years, which includes fine and is non-bailable.

If the offense exceeds Rs200 Lakhs, to avoid taxes, then the imprisonment duration is three years along with penalty. If convicted of any other offense exceeds Rs 100 Lakhs, and then the imprisonment duration is one year with a penalty

A taxpayer must be cautious and transparent about complying with the GST rules. He must not violate GST rules in order to attract penalties and punishment. In case of confusion, a taxpayer can always consult and seek guidance from the GST council that is composed of experts in the said area. Always try to comply with the GST laws.

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