What Happens if You Forgot to File Your GST?

Ever since its inception, the Goods and Services Tax, or GST, has been a funny concept to wrap one’s head around. It has totally changed the way retailers and distributors pay tax, and how customers do the same when they avail certain services or buy particular goods. Instead of separate taxes, such as service taxes, value-added and state taxes, customers and retailers now pay one unified tax, the GST, to both the centre and the state. The rates of GST vary from about 5% to 28%, depending upon the commodity. For instance, restaurants and ready to eat outlets have to charge a five per cent GST from their customers according to the rules and regulations.

With the new rules also came to the new regulations for filing tax returns. The GST laws clearly define the types of returns that every retailer or manufacturer has to file, depending upon its business. Here, we discuss what happens if you forget or fail to file your GST returns, and what steps to take to remedy the situation.

Penalties and offences

Under the GST rules, there are many offences which may be committed either knowingly or unknowingly by retailers or manufacturers. These include not registering for the GST, issuing false invoices for goods or services, obtaining refunds by fraud, or deliberate suppression of sales to evade paying tax. All of these are punishable offences, and require penalties to be paid.

One of these offences is failing or forgetting to file a GST return. As we know, even if no GST is applicable on retailers registered under the law, a nil return has to be filed. If a GST return is not filed, it incurs heavy penalties and cascading troubles.

According to the GST rules, if you forget to file your GST returns, you will attract a late fee penalty of INR 100 per day per act. This implies that if you file your GST returns 5 days after the due date, you will incur INR 500 late fee penalty per act, which is the same for both central and state GST act, thereby taking the total penalty to INR 1000. This can be taken to a maximum of INR 5000.

Along with this late fee, an interest of 18% per annum has to be paid on the tax, calculated by the taxpayer. From the next day of filing to the next day of payment, the taxpayer calculates the time period and the total tax to be paid with interest.

If you do not file your GST return, you cannot file any subsequent returns. For instance, if you do not file the GST return for the month of August, you will not be able to file one for the month of September, thereby incurring late fee penalties on both returns. Hence, not filing or forgetting to file your GST is a serious issue and should not be allowed to happen, lest it destroys your business accounts.

Steps to take

If you fail to file or forget to file your GST returns, it is advised to do so as early as possible. Paying the penalties along with the interest on the tax is the way to start, and it will enable you to file subsequent returns as well. Not filing GST returns in one month would lead to not being able to file them for the subsequent months, which can be disastrous, and must be avoided. Therefore, the best way to fix the problem of not filing or forgetting to file your GST return is to pay the penalties and file it as soon as possible!