Penalty Upto Rs. 1 Lakh Can be Imposed If GST Nil Returns Not Filed on Time:

File GSTR-3B monthly, even with no business, i.e., NIL returns, otherwise penalty up to Rs. 1 lakh can be imposed on the taxpayer.

Why GST Nil Returns Should be File on Time?

Saloni Kumari

Jun 2, 2025

Last update on Jun 2, 2025

Penalty Upto Rs. 1 Lakh Can be Imposed If GST Nil Returns Not Filed on Time

A taxpayer got a GSTIN in November 2020 and applied for the GST registration, but did not do any business – no sales, no purchases, nothing.

Because of no activity, the taxpayer didn’t file any GST returns like GSTR-3B. The GST department cancelled the GST registration on its own in September 2021 due to non-filing of returns.

GST Registration Cancelled in 2021

As no transactions were done, all returns would have been filed “Nil”.
The GST department, on its own, cancelled the GST registration in September 2021.

Still Penalty of Rs. 110000 Will be Charged

GSTR-3B is a return that is required to be filed every month, even if no transactions are made.
A late fee will be automatically calculated if the taxpayer does not file GSTR-3B within the time period of 10 months.

Late Fee Applicable If GSTR-3B Return Not Submitted On Time

Normal Return: Rs. 50 per day (Rs. 25 CGST + Rs. 25 SGST).
Nil Return: Rs. 20 per day (Rs. 10 CGST + Rs. 10 SGST).
Maximum: Rs. 10,000 per return (Rs. 5,000 CGST + Rs. 5,000 SGST).

System Computed For Filing Returns from Nov 2020

Rs. 10,000 late fee per month
Rs. 10,000 × 10 months = Rs. 1,00,000

Late Fee Applicable If Unable to Submit GSTR-10

If your GST registration is cancelled or surrendered, you must file a final return called GSTR-10. You need to file this return within the time period of 90 days from the later of these two dates: The date your GST was cancelled or the date you received the cancellation order.

Late fee: Rs. 200 per day (CGST Rs. 100 + SGST Rs. 100)
Maximum penalty: Rs. 10,000

Total Late Fee:

GSTR-3B not filed (10 months): 10,000/month × 10 = Rs. 1,00,000
GSTR-10 not filed in 90 days: Rs. 200/day capped at Rs. 10,000

Key Points to Keep in Mind

Always file GSTR-3B monthly, even with no business. Means NIL returns on time.
If the business is inactive, cancel the GSTIN voluntarily – don’t wait for the GST department to cancel it. Cancel it from your side.
After cancellation, file GSTR-10 within 90 days to avoid a penalty of Rs. 200 per day.

About Author

Saloni Kumari

Content Writer

Saloni is a Content Writer with 2+ years of experience at studycafe.in. She writes legal, taxation, and finance related content including GST, Income Tax etc. Skilled in translating complex judicial pronouncements and regulatory developments into clear, and reader-friendly articles. Experienced in covering judgements of ITAT, High Court, GSTAT, and news related to Income Tax, GST, and corporate law. She can be reached at [email protected].