GST Compliance & Penalties

Staying compliant beyond returns

GST compliance extends well beyond filing returns. Modern compliance includes e-invoicing, e-way bills, reconciliations and responding to departmental notices. Falling short triggers a structured penalty regime.

E-invoicing and e-way bills

E-invoicing requires notified taxpayers (above a turnover limit) to generate invoices on the government's Invoice Registration Portal, which returns an IRN and QR code. The e-way bill is mandatory for moving goods worth over ₹50,000; it carries a unique number that must accompany the consignment.

Penalties and interest

Late filing of returns attracts a late fee per day (capped) and interest (commonly 18% p.a.) on tax paid late. For more serious defaults — tax not paid, short paid, or wrongly refunded — penalties can reach 10% of tax (minimum ₹10,000) for non-fraud cases, and up to 100% of tax for fraud, plus possible prosecution.

Audits and best practice

The department can conduct audits and issue notices (such as ASMT-10 for return scrutiny or DRC-01 for demands). The best defence is proactive compliance: timely returns, monthly GSTR-2B reconciliation, valid e-way bills, and prompt, documented responses to any notice.