Late GST Registration may Levy Penalty

By Registrationwala

9th September 2017


In India, it is mandatory for every person whose annual turnover exceeds the threshold limit of 10 lakhs in north eastern states and hill station while 20 lakhs in other places to obtain GST registration.  Further, the taxpayers who were earlier registered under some other tax regime are required to obtain migration into the new taxation regime. Under the goods and service tax regime, the base of taxation has been increased immensely due to the presence of the provisions like reverse charge mechanism.

Through GST a sincere attempt has been made to make people more compliant and pay taxes regularly. Thus penalties are levied on every stage to prevent non- compliance of rules and regulations.

Penalty for not obtaining GST registration

In case a taxable person who is liable to obtain GST registration fails to get himself registered under the said regime then he will be liable to pay a penalty. As per section122 of CGST act, the penalty of Rs.10,000 or amount of tax evaded or any short tax liability whichever is higher will be levied.

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.

 Penalty for late registration

Generally, the penalty for late registration is only levied in case the taxpayer is caught by the tax department and if the department does not notice that the taxpayer has obtained late registration then the penalty might not be levied.

However, if the taxpayer obtains the registration after receiving the notice from the department in that case, the penalty shall be applicable. The amount of penalty will be equal to Rs 10,000 or the amount of tax evaded or any short tax liability whichever is higher.

Further, one question that arises here is that whether the late fees that are levied on late filing of returns will apply in the case of late registration or not?

The penalty for late filing of returns is only levied in case of taxpayers who are registered under the GST regime. Thus no penalty would be levied for late filing of returns as the taxpayers who have obtained late registration were not registered under the GST regime.

In addition to this if the taxpayer obtains late registration under the GST regime then it will adversely impact his compliance rating. Acquiring a good compliance rating is very crucial for any taxpayer as it acts as a civil score for any business entity which reflects the credit worthiness of the person.  



Late GST Registration may Levy Penalty