If a business under the Composition Scheme fails to comply with the GST rules and regulations or defaults on payment of taxes, it will be subject to penalties and fines.
The following are the penalties that businesses under the Composition Scheme may face:
- Late fee: If a business under the Composition Scheme fails to file the GSTR-4 or GSTR-9A returns within the prescribed due dates, it will be liable to pay a late fee of Rs. 200 per day of delay (Rs. 100 for CGST and Rs. 100 for SGST) up to a maximum of 0.25% of the business’s turnover in the state or union territory.
- Penalty for non-compliance: If a business under the Composition Scheme fails to comply with the GST rules and regulations or defaults on payment of taxes, it will be liable to pay a penalty of 10% of the tax due or Rs. 10,000, whichever is higher.
It is important for businesses under the Composition Scheme to ensure timely compliance with the GST rules and regulations and payment of taxes to avoid any penalties or fines.
