Penalty on late GST registration or failure to take GST registration in India – Penalty for non-GST registration

1.0 Introduction

As per GST act, there is a direct penalty for failure to take GST registration in India and the same is levied even in case of late GST registration.

As per section122 of CGST act, any taxable person who fails to take GST registration though he is liable to be registered under the act, then the penalty of Rs.10,000 or amount of tax evaded or any short tax liability whichever is higher.

Hence, if any person fails to take GST registration and the total tax liability after calculation comes to Rs.2 lakh, then the penalty for failure to take GST registration shall be 2 lakh or Rs.10,000 whichever is higher and hence, Rs.2 lakh shall be levied.

2.0 Penalty in case of late GST registration

As a general rule, the penalty is levied once the person is caught by the tax department. In case of late registration, if the taxpayer is not caught by the department, then the penalty might not be levied.

However, if the department issues you a notice and then you apply for GST registration, in that case, penalty, as described above, shall be applicable.

3.0 Will the late fees shall also apply if no registration is taken?

This is also one of the most important questions as to whether the late fees which are levied for late filing of GST return shall also apply where a person fails to take GST registration.

The answer is no. The Late fees under section 47 shall not apply because it is applied only in case of a registered person and in our case since the person is not registered person, and hence penalty for not filing of GST return shall not be applicable.

4.0 Notice to return defaulters

Where any person fails to file the GST return, the government shall issue a notice to the return defaulter to file the GST return within 15 days.

5.0 Impact on Compliance rating

Compliance rating under GST has a very different concept altogether. Compliance rating is like a civil score which ascertains the credit worthiness of a person. Similarly, the compliance rating shall assess the goods and bad GST taxpayers.

Hence, if any person fails to take the GST registration or fails to file the GST returns on time, then the compliance rating shall be impacted.

6.0 Conclusion

In case you have any doubt, please email us at info@hubco.in.

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