Most Businesses often wonder what happens if they skip one month’s GST Filing costs. This happens for many reasons, such as administrative burdens, errors and discrepancies, technical glitches, and cash flow issues. It may seem harmless to skip one month’s GST Filing, but under the GST Law, every registered taxpayer must file returns regularly, even if there are no sales or purchases in that period.
What Happens If You Skip One Month?
Skipping one month’s GST Filing can cause you a lot of trouble. The main issues you face are:
- Late Fees: A Daily Late fee will be charged for each missed return (GSTR-1 and GSTR-3B) until it is filed. You have to remit ₹50 per day (₹25 CGST + ₹25 SGST) if you have a tax liability. If you have no sales or purchases, you must file a NIL Return. For that, you have to remit ₹20 per day (₹10 CGST + ₹10 SGST). Thankfully, the late fee is capped at ₹10,000 for large taxpayers and ₹500 for Nil returns.
- Interest Charges: Additionally, an interest rate of 18% per annum is imposed on you if you don’t pay tax on the payment due date. The interest will be calculated from the due date until the actual payment date.
- Blocked Input Tax Credit: The recipient of the supplies cannot claim their entitled Input Tax Credit if the supplier hasn’t correctly filed their returns. This can severely affect their business relationship.
- Further GST Return Filing Not Possible: If you are unable to return previous GST Return filings, you cannot file subsequent returns either.
- E-way Bill Generation Blocked: If you didn’t file for two consecutive months, the ability to generate e-way bills will also be blocked. This will clearly affect the movement of goods and the operation of businesses.
- GST Registration Cancellation: If you have not filed GST returns for consecutive 6 months, your GST Registration will be cancelled.
- Damage to Reputation: If this company fails to file GST returns consecutively, it will affect its reputation, and other companies will hesitate to trade with it.
What To Do If You Missed GST Filing?
If you missed GST Filing for any reason, don’t hesitate to file your pending returns and remit the late fees as soon as possible. Remember, the late fees will stop accumulating once you file your returns. Try to pay the applicable tax and interest regularly without absence. Reconcile your books to avoid any errors before GST Filing. You can also set reminders in accounting software like Tally and the GST portal for the GST Filing procedure. These reminders will prompt you to complete the filing task on the correct due date.
Remember, if you are skipping one month’s GST Filing, even this can degrade you before the tax authorities. It can also seriously affect your compliance status. A common mistake everyone makes is forgetting to file NIL Returns. Don’t make this mistake, as not remitting NIL Returns can also cost you penalties. It is always safer to file on time so that you can keep a clean GST record and ensure smooth business operations.
