Answer By law4u team
Penalties for GST non-compliance in India depend on the nature and severity of the violation. The Central Goods and Services Tax (CGST) Act, 2017 prescribes penalties for different types of offenses. 1. Late Filing of GST Returns If a taxpayer fails to file GST returns on time, they must pay a late fee and interest. Penalty: Rs. 50 per day (Rs. 25 CGST + Rs. 25 SGST) for regular returns. For NIL returns: Rs. 20 per day (Rs. 10 CGST + Rs. 10 SGST). Interest: 18% per annum on the outstanding tax amount. 2. Non-Payment or Short Payment of GST If GST is not paid or is underpaid due to genuine errors, a 10% penalty is imposed (minimum Rs. 10,000). If non-payment is due to fraud, suppression, or willful misstatement, the penalty is 100% of the tax amount due. 3. Incorrect GST Invoice or Fake Invoices Issuing incorrect or fake invoices to claim input tax credit (ITC) illegally can attract a penalty of Rs. 10,000 or 100% of the tax amount, whichever is higher. 4. Failure to Register Under GST If a business is required to register but fails to do so, it must pay a penalty of 10% of the tax due or Rs. 10,000, whichever is higher. 5. Not Displaying GSTIN on Signboards or Tax Invoices Businesses must display their GST Identification Number (GSTIN) at their place of business. Penalty: Rs. 25,000 for non-compliance. 6. Not Issuing GST Invoices Failing to issue invoices as per GST law can result in a penalty of Rs. 10,000 or the tax amount due, whichever is higher. 7. E-Way Bill Violations Transporting goods worth more than Rs. 50,000 without an E-Way Bill can lead to: A penalty of Rs. 10,000 or the tax amount due, whichever is higher. Seizure of goods and vehicle. 8. GST Fraud (Suppression, Misstatement, Fake ITC Claims) If a person commits fraud, issues fake invoices, or wrongfully claims ITC, the penalties are: 100% of tax evaded or Rs. 10,000, whichever is higher. Criminal prosecution, including imprisonment (if tax evasion exceeds Rs. 5 crore). 9. Obstruction of GST Officers Hindering or preventing a GST officer from performing their duty can lead to a penalty of up to Rs. 25,000. 10. GST Prosecution and Jail Terms Tax evasion between Rs. 1 crore and Rs. 2 crore: Up to 1 year imprisonment and fine. Tax evasion between Rs. 2 crore and Rs. 5 crore: Up to 3 years imprisonment and fine. Tax evasion exceeding Rs. 5 crore: Up to 5 years imprisonment and fine.
