The government has issued a new notification revising penalties for GST non-compliance to strengthen enforcement while also promoting clarity in penalty structures. The revised norms categorize offences based on their severity and intent, ensuring that genuine errors are treated differently from willful evasion. The updated framework introduces graded penalties for issues like late return filing, incorrect reporting, and ineligible input tax credit claims.

Under the new rules, a late fee of ₹50 per day (₹25 each for CGST and SGST) continues to apply for delayed return filing, subject to a maximum cap. However, deliberate suppression of turnover, bogus ITC claims, or fake invoicing will attract heavier penalties up to 100% of the tax amount involved, along with possible prosecution in extreme cases. The revised rules also empower authorities to levy penalties on e-commerce operators, transporters, and suppliers who fail to meet invoice and e-way bill compliance requirements.

To ensure fairness, the government has included provisions for penalty waiver or reduction in case of voluntary disclosures, technical system errors, or procedural lapses without tax implications. These updates are part of a broader strategy to encourage voluntary compliance, reduce litigation, and protect honest taxpayers. With enhanced clarity and proportional enforcement, the revised penalty norms are expected to foster a more balanced and predictable GST regime.