Penalties and Late Fees for Not Filing GST NIL Returns on Time

Even if your business had no sales or purchases in a given month, filing GST returns on time is still mandatory for every GST-registered business. Many taxpayers mistakenly assume that no transactions mean no filing is required. This is not true-under the GST law, Nil Returns must be filed for months with no business activity. Failing to do so can attract late fees and create unnecessary compliance hurdles.

In this guide, we break down everything you need to know about GST Nil Returns: what they are, why they are mandatory, how to file them online, and the penalties you could face for late filing.

What is a GST Return?

A GST return is a statement submitted by every registered taxpayer for each tax period. It includes details such as outward supplies (sales), inward supplies (purchases), input Tax Credit (ITC), tax payable and paid. Even if a taxpayer has no transactions, the return must still be filed. A month without business activity does not exempt a taxpayer from filing.

So, do you have to file GST returns even if you have zero business activity?

Yes. Under GST rules, every registered person must file returns for every tax period, irrespective of turnover or activity.

What is a GST Nil Return?

A GST Nil Return is filed when a taxpayer has no sales, purchases, or ITC tax liability for that particular month or quarter. Even in such cases, the GST law mandates filing. Failure to file a Nil Return results in late fees, just like filing a regular return late.

Types of GST Nil Returns

Under the current GST compliance system, Nil Returns may be required for two major forms:

1. GSTR-1 (Outward Supplies Return)

Filed monthly or quarterly to report outward supplies. When there are no sales, a Nil GSTR-1 must be filed.

2. GSTR-3B (Monthly Summary Return)

A monthly self-declaration summarising sales, purchases, ITC, and tax liabilities. When all values are zero, a Nil GSTR-3B must be filed.

Not filing these on time will block future return filings and accumulate penalties.

How to File Nil GSTR-3B Online

The process of filing Nil GSTR-3B is quick and fully online:

1. Log in to the GST Portal and open the Returns Dashboard.
2. Choose the relevant tax period.
3. Click GSTR-3B - Prepare Online.
4. When asked, select "Yes" for: Do you want to file Nil Return?
5. Confirm details on the verification page.
6. File using EVC (OTP-based) or DSC (Digital Signature Certificate).

Your Nil GSTR-3B for the month will then be successfully filed.

How to File Nil GSTR-1 Online

To file Nil GSTR-1, follow these steps:

1. Log in to the GST Portal and go to the Returns Dashboard.
2. Select the required month.
3. Click Prepare Online under GSTR-1.
4. Go to B2C (Others) under "Other Details".
5. Select the Place of Supply and enter zero in all fields.
6. Click Save, then return to the summary page.
7. Click Generate Summary.
8. Review and click Submit.
9. File using EVC or DSC.

Your Nil GSTR-1 will now be recorded for that tax period.

Penalties for Late Filing of Nil GST Returns

Late filing of Nil returns attracts mandatory late fees under GST. Earlier, the fee was Rs 200 per day (Rs 100 CGST + Rs 100 SGST). This was later reduced by the CBIC to ease compliance.

Current Late Fee for Nil GSTR-1 & GSTR-3B

The current late fee for filing a Nil GSTR-1 or GSTR-3B return is Rs 20 per day, which comprises Rs 10 CGST and Rs 10 SGST. This late fee continues to accumulate each day until the pending return is filed. However, if the taxpayer has any tax liability for the period, a higher late fee applies as per GST regulations.

Conclusion

Every GST-registered business must file a Nil GST Return even when there is no sale or purchase. If GSTR-1 or GSTR-3B is delayed, late fees and filing issues can arise. Filing on time keeps your GST registration active and avoids penalties. Whether your business is running or not, Nil GST Returns must always be filed on time.

Setindiabiz helps businesses stay GST-compliant by guiding them through the timely filing of Nil GSTR-1 and GSTR-3B returns. With expert support, you can avoid late fees, maintain an active GST registration, and ensure hassle-free compliance even during months with no transactions.