Sr. No. |
Default related to |
Type of Default |
Description of Default |
Penalty |
1 |
GSTIN |
- Fail to mention GSTIN on all name boards.
|
- It is compulsory to mention GSTIN on all name boards of your business.
|
Up to Rs. 25,000 |
2 |
Composition Dealer |
- Fail to mention GSTIN and details of composition registration on all name boards.
|
- It is mandatory for all composition dealers to mention “composition taxable person not eligible to collect tax on supplies” along with GSTIN.
|
Up to Rs. 25,000 |
3 |
GST Registration |
- Fail to display registration certificate at all places of business.
|
- It is mandatory for every taxable person registered under GST to display certificate of registration at all places of business.
|
Up to Rs. 25,000 |
- Fail to obtain registration within 30 days from the date on which liability for registration arises.
|
- Section 22 of CGST Act 2017 mandates every person to register if the aggregate turnover exceeds Rs. 20 Lakhs.
- There are two possible cases of non-compliance in this category.
- An assessee do not obtain registration despite he is liable for the same.
- Registration is obtained after the threshold limit of 30 days.
|
Rs. 10,000 + ITC during the period of delay is lost
|
4 |
Invoice |
- Fail to issue invoice despite effecting outward supply.
|
- Invoice contains details of outward supply and GST charged on such supply.
- The amount of ITC is also determined on the basis of Invoice.
- If an assessee fails to issue invoice or issues a wrong invoice, such act may be treated as non conformance and subject to penalty.
- This situation may lead to supply without recording it and also the buyer may lose ITC since he doesn’t possess proper invoice.
|
Rs. 10,000 or 100% of tax evaded, whichever is higher |
- Issuance of Invoice without actual supply of goods / services.
|
- Every invoice issued must be correspond with actual supply of goods / services.
- If an invoice is issued without actual supply of goods / services, it may be subject to penalties.
|
Rs. 10,000 or 100% of tax evaded , whichever is higher |
- Fail to Issue appropriate Invoice.
|
- It is mandatory to issue Tax Invoice by every registered dealer u/s 9 of CGST Act.
- Composite Dealers registered u/s 10 must issue Bill of Supply on all outward supplies.
- GST Act also prescribes other documents like Receipt Vouchers, Refund Voucher etc.
- Fail to issue appropriate invoice / document is an act of non-conformance under GST.
|
Up to Rs. 25,000 |
5 |
ITC |
- Availing Input Tax Credit on the basis of wrong Invoice.
|
- ITC can be taken only on the basis of valid invoices issued by registered dealers.
- If any ITC is taken on the basis of a wrong invoice, such ITC is invalid and must be reversed along with interest and penalty.
|
Rs. 10,000 or 100% of ITC wrongly availed, whichever is higher + 24% Interest from date of availment to date of reversal |
6 |
Payment of Tax |
- Fail to deposit GST to the credit of the Government collected during outward supplies.
|
- GST collected at the time of outward supplies must be remitted to the credit of Government.
- Not depositing GST in due date shall be treated as an instance of tax evasion which may result into stiff penalties under GST.
|
Rs. 10,000 or 100% of tax evaded, whichever is higher
|
- Payment of IGST instead of CGST/SGST.
Or
- CGST instead of IGST/SGST.
Or
- SGST instead of CGST/IGST.
|
- IGST must be charged and remitted for all inter-state supplies.
- CGST & SGST must be charged and remitted for all intra-state supplies.
- GST charged under a given head must be remitted under the same head.
- If GST is remitted under a different head, such amount would get transferred to the credit of respective government.
- Hence, it is critical to deposit GST under appropriate head.
|
Pay Tax under correct head with no interest and claim refund of tax paid under wrong head. |
7 |
Stock Records |
- Fail to maintain proper records of the Stocks.
|
- as per Rule 56(2) of CGST Rules, 2017, it is mandatory for all registered dealers to maintain accurate stock record.
- Failure to maintain stock records shall be treated as an instance of non-conformation and may attract penalties.
|
Up to Rs. 25,000
|
8 |
General Penalty |
- For all non-specific defaults
|
- In case of any default in respect of which no provisions for penalty / interest etc is specific under GST, general provision for penalty shall apply.
|
Up to Rs. 25,000 |