GST or Goods and Services Tax is a consolidated taxation system, which effectively replaced several state and central indirect taxes. With GST, businesses need to register their company on a central database. After this registration is complete, each brand receives a unique identification code, known as GSTIN.
Still, since the launch of the programme, several entities have remained non-compliant in payment of such taxes. Doing so is fraught with dangers, ranging from penalties to even cancellation of the GST registration in some cases.
Delay in paying GST also leads to penalty fees. The charge varies, depending on the number of days in delays. In severe cases, companies may end up losing a quarter of their annual turnover for improper GST payments.
Cancellation of GST registration may occur under several circumstances, including failure to file GST for a period of six months or more, GST registration that results from fraud or false information, GST registration for a business that is yet to start operations, even after six months from the date of registration.
However, one cannot deny that clearing GST liabilities within the stipulated time leads to several benefits. For instance, if a company approaches an NBFC for business loans, it would need to furnish proof of GST compliance before availing the said credit.