It is essential to file your VAT return on time, whether filing it in India or the UAE. This is because Value Added Tax or VAT is payable by traders, and you need to file the return to ensure that you can carry out your business operations with ease. However, it would help if you also remembered that there is a penalty on the late filing of the vat return. Like any other tax, there is a fixed date within which you need to file your VAT returns, after which you become liable to pay the penalty. There are certain factors that you need to understand about the penalty on late filing of vat return, and some of these are as follows:
Penalty in the UAE
In the UAE, the filing of VAT returns is quite strict, and you need to be careful about the penalties. The penalties increase by the number of days you fail to file the VAT returns. For example, if you fail to pay the VAT by one day or a week, the penalty payable will be two percent of the total tax payable. But the amount will continue to increase as the VAT return filing gets delayed. For example, if the delay is a month, the penalty will be four percent. This can prove to be a considerable amount, which is essential to ensure that the VAT returns are filed on time.
Penalty in India
In India, too, filing VAT returns on time is essential. But the penalties are calculated not based on the capital value or the tax payable but a ceiling limit fixed by the government. This has been done to give the traders a certain amount of respite. However, this does not mean that there cannot be strict penalties. In India, too, the penalties for not filing the VAT return on time can range from ten thousand rupees to fifty thousand rupees.
Therefore, you must ensure that your VAT filing is done on time. It will help you avoid attracting penalties and continue your business operations with ease. It will also help you evaluate the taxes you are liable to pay. VAT also helps you understand the financial condition of your company. So if you are planning to evaluate your company’s business operations and financial operations, one of the ways would be to evaluate your VAT returns.