Monetary Penalties for Delay or Default

• Failure to obtain PT registration (PTRC for employers or PTEC for self-employed) leads to monetary penalties imposed by the respective state authority.
  
• The penalty amount varies by state and may include:
  
  • A fixed fine for each month of delay.
    
  • A lump sum penalty up to ₹5,000 or more depending on the duration and nature of non-registration.
    
• States may also charge late registration fees as part of the penalty computation.
  

Accrual of Tax Dues with Interest

• If an entity fails to register but is liable to pay PT, the tax authority may recover backdated tax dues from the date the liability arose.
  
• Interest on unpaid tax is levied, typically at 1% to 2% per month, until the dues are cleared.
  
• The longer the delay in registration, the higher the interest liability for the business or individual.
  

Loss of Legal Compliance Status

• Non-registration is considered a violation of state tax laws, leading to a non-compliant business status.
  
• It may affect eligibility for government tenders, license renewals, trade registrations, and financial audits.
  
• Entities without PT registration cannot obtain a PT clearance certificate, often required for official or contractual dealings.
  

Departmental Inspection and Legal Action

• Tax authorities have the right to conduct inspections or audits of businesses operating without registration.
  
• Discovery of non-registration can result in legal proceedings, including seizure of records and imposition of additional fines.
  
• Repeat or willful defaulters may face prosecution under applicable state tax acts.
  

Denial of Benefits and Refunds

• Entities that are not registered are ineligible to claim any refunds, adjustments, or exemptions under PT law.
  
• They also lose access to grievance redressal or compliance correction mechanisms available to registered taxpayers.
  
• Any tax paid without registration may be treated as unauthorized or unrecognized by the department.