A taxpayer has applied for the GST registration and he got the GSTIN in November 2020.
As there was no business activity - no sales, purchases or taxable supplies, he didn't filed any GST returns including GSTR-3B from the start.
Department Cancelled the Registration in September 2021
Since there were no transactions, all returns would have been filed “Nil” .
The GST registration was suo motu cancelled by the department in September 2021.
Still Received ₹110000 Penalty
GSTR-3B is a monthly return that must be filed every month even if there are no transactions.
As the taxpayer didn’t filed GSTR-3B for 10 months, a late fee was auto-calculated.
Late fees if not filed on time:
- Normal Return: ₹50 per day (₹25 CGST + ₹25 SGST).
- Nil Return: ₹20 per day (₹10 CGST + ₹10 SGST).
- Maximum: ₹10,000 per return (₹5,000 CGST + ₹5,000 SGST).
System Computed For Filing Returns from Nov 2020
₹10,000 late fee per month
₹10,000 × 10 months = ₹1,00,000
Late Fees Applied For Failure to File GSTR-10
A taxable person whose GST registration is cancelled or surrendered has to file a return in Form GSTR-10 called as Final Return.
The final return in Form GSTR-10 is required to be filed within 90 days from the date of effective date of cancellation or date of cancellation order, whichever is later.
If not filed:
- Late fee: ₹200 per day (CGST ₹100 + SGST ₹100)
- Maximum penalty: ₹10,000
Total Late Fee Become
| GSTR-3B not filed (10 months) | ₹10,000/month × 10 = ₹1,00,000 |
| GSTR-10 not filed in 90 days | ₹200/day capped at ₹10,000 |
Points To Remember
- File your monthly GSTR-3B, even if there is no business i.e, Nil return on time.
- Cancel the GST Registration if your business is inactive or closed and apply for voluntary cancellation of GSTIN. Do not wait for the department to cancel it suo motu.
- File GSTR-10 within 90 days of cancellation order to avoid ₹200 per day late fee, which maxes at ₹10,000.
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