Penalties for Non‑compliance GST registration Mumbai

Penalties for Failure to Register under GST

If your turnover surpasses the threshold—₹40 lakh for goods or ₹20 lakh for services—you must register for GST. Failing to do so triggers penalties:

Penalty is 10% of the tax due, but at least ₹10,000, whichever is higher.

In cases of deliberate evasion, the penalty escalates to 100% of the tax due.

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Related Penalties Under GST
1. Late Filing of GST Returns

GSTR‑3B (regular taxpayers): ₹50/day (₹25 CGST + ₹25 SGST), capped at ₹5,000.

Nil returns filers: ₹20/day (₹10 CGST + ₹10 SGST), capped at ₹5,000.

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2. Late Payment of GST

Interest at 18% per annum, from the due date until the payment is made.

If wrongful input tax credit (ITC) was claimed, interest may go up to 24% per annum.

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3. Incorrect or False Information

Non-fraudulent errors: Penalty is 10% of tax due, minimum ₹10,000.

Fraud cases: Penalty is 100% of tax due, minimum ₹10,000.

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Earnlogic
Tax2win

4. Non-Issuance of Invoices

Penalty is 100% of the tax due or ₹10,000, whichever is higher.

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credencecorpsolutions.com
Zoho

5. General or Other Offenses

If a specific penalty isn't prescribed, a general fine of up to ₹25,000 may apply.

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Zoho

6. Asset Seizure & Confiscation

For supply without registration or to evade tax, goods or conveyances may be confiscated along with a penalty: ₹10,000 or the tax evaded.

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7. Criminal Prosecution

Serious offences—especially tax fraud or repeated violations—carry jail terms in addition to fines:

Tax Evasion Amount Maximum Jail Term Fine Applicability
₹1 crore – ₹2 crore Up to 1 year Yes
₹2 crore – ₹5 crore Up to 3 years Yes
Above ₹5 crore or Repeat Offense Up to 5 years Yes

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Zoho
Avalara

Business Impact Beyond Penalties

Non-compliance can lead to broader consequences:

GSTIN Blocking or Cancellation: Especially if returns aren't filed or registration is fraudulent.

Loss of Input Tax Credit (ITC): Without registration, you can’t claim ITC—impacting your bottom line.

Reputational Damage: Suppliers, customers, and e‑commerce platforms may shy away.

Operational Disruptions: Authorities may seize assets, cancel GSTIN, or bar participation in govt tenders.

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Reddit

One user insight from Reddit captures the intangible costs:

“Penalties, interest, loss of input tax credit, legal actions, and damage to reputation.”

Reddit

Key Takeaways

Non-registration can lead to penalties ranging from 10% to 100% of tax due (min ₹10,000).

Late return filing or payment invokes fees and interest.

Fraud or repeated non-compliance may lead to asset confiscation, fines, and jail time.

Beyond penalties, your business can face operational hurdles and loss of credibility.

What You Can Do

If you're over the GST threshold, register immediately to avoid retroactive penalties.

Stay disciplined with filings—late fees and interest add up fast.

In case of notice or non-compliance, consider consulting a GST practitioner for mitigation or compliance revival.