In Pakistan, businesses that are registered for GST are required to file periodic returns with the Federal Board of Revenue (FBR). If a business fails to file its GST returns on time, it may be subject to penalties and interest charges.
The specific penalties for not filing GST returns on time depend on the length of the delay and the annual turnover of the business. In general, the longer the delay in filing the GST returns, the higher the penalties will be.
For businesses with an annual turnover of more than PKR 50 million (approximately $310,000), the penalties for not filing GST returns on time are as follows:
- If the delay is less than 30 days, the penalty is equal to 2% of the tax due per month of delay, up to a maximum of 20% of the tax due.
- If the delay is more than 30 days, the penalty is equal to 5% of the tax due per month of delay, up to a maximum of 50% of the tax due.
For businesses with an annual turnover of less than PKR 50 million, the penalties for not filing GST returns on time are as follows:
- If the delay is less than 30 days, the penalty is equal to 1% of the tax due per month of delay, up to a maximum of 10% of the tax due.
- If the delay is more than 30 days, the penalty is equal to 2.5% of the tax due per month of delay, up to a maximum of 25% of the tax due.
In addition to these penalties, businesses that fail to file their GST returns on time may also be subject to interest charges. The interest rate for late payment of GST is 18% per annum.
It is important to note that these penalties and interest charges may be waived or reduced in certain circumstances, such as if the business can demonstrate that the delay was due to circumstances beyond its control.