Equipping Modern Enterprises with Powerful GST & E-Way Bill Solutions

logo image
  • GST Filing & Reconciliation
  • E-Way Bill Automation
  • GSTIN Search & E-Way Bill APIs

Penalty for Not Registering or Late Registering Under GST

According to the GST act, any person who fails to obtain registration or registers late under GST needs to pay the penalty. In this article, we will see the penalties levied for not registering or late registering under GST.

Penalty for Not Registering under GST

According to the section 122 of CGST Act, any taxable person who fails to register under GST even if he/she is legally bound as per the GST Act needs to pay the following amount of penalty:

10,000 INR or amount of tax evaded whichever is higher.

Let us understand this with an example;

  1. If Mr. A fails to obtain GST registration and the total tax evaded by him amounts to 30,000 INR then in this case 30,000 INR penalty will be applicable.
  2. If Mr. A fails to obtain GST registration and the total tax evaded by him amounts to 8,000 INR then in this case he needs to pay 10,000 INR as a penalty.

Penalty for registering late under GST

There is no such special provision but there is a general rule if the taxable person gets caught by the GST authorities for applying late for the GST registration penalty will be levied. The quantum of penalty applicable in this case will be:

10,000 INR or amount of tax evaded whichever is higher.

Let us understand this with an example;

  1. If Mr. B applies late for GST registration and the total tax evaded by him amounts to 50,000 INR then in this case 50,000 INR penalty will be applicable.
  2. If Mr. B applies late for GST registration and the total tax evaded by him amounts to 9,000 INR then in this case he needs to pay 10,000 INR as a penalty.

Consequences for not obtaining GST registration on time

Here is the list of consequences that one might face for not obtaining GST Registration on time:

  1. A penalty of 10,000/- INR or tax invaded – whichever is higher
  2. Input Tax Credit (ITC) cannot be claimed
  3. Input Tax Credit (ITC) cannot be transferred
  4. Detention of Goods
  5. Detention of vehicle
  6. Confiscation of Goods
  7. Confiscation of vehicle

Is there any late fee for not filing GST Return?

This is the most important question whether the late fee for filing GST Return is applicable if that person fails to obtain GST registration. The late fees as per Section 47 of CGST applies to the registered person, however, the person in our case is not registered under GST. So, no late fees or penalty will apply to him/her for not filing the GST Return.

Impact on the compliance rating

The compliance rating is all together is a completely different concept under GST. Compliance rating under GST is like the CIBIL score. Just like the CIBIL score helps the bank to know the creditworthiness of a person similarly, the compliance rating helps in ascertaining whether the taxpayer is GST compliant or not.

So, the compliance rating of a person may get negatively impacted for not obtaining the GST registration on time or for not filing the GST Return timely.