GST NIL Return Filing

September 13, 2025 by Team Instabizfilings

Introduction to GST (Goods and Services Tax)

Goods and Services Tax (GST) refers to a common system of indirect taxes applied in India to streamline the taxation system and eliminate cascading taxes. GST is charged on the provision of goods and services and it comes with various charges depending on the nature of the product or service.

What is GST Nil Return Filing?

Nil GST Return filing refers to the submission of GST returns by a taxpayer whose business has no taxable supply or no outward supply during a specific tax period. In simpler terms, a company or individual who is registered under GST but has not made any sales or business transactions during the return period must file a "Nil" return.

Even if no business activity occurs, GST law mandates that registered taxpayers must file their returns on time. A Nil return is a way to declare that the taxpayer's business is temporarily inactive.

Who Needs to File Nil Returns?

GST Registered Businesses with No Activity: It is listed that where the business is registered under GST, but it has not yet actually carried out any activity (sale or purchase), it is expected to file a Nil return.
Inactive Businesses: A business should file Nil returns even when he or she temporarily suspends the business.
Start-ups: New businesses can claim Nil returns in case they have not started selling, but must still comply with GST.
Non-Taxable Income: In the case of a registered entity whose income earned in an accounting period is not subject to tax under GST (e.g. the income earned in non-business areas), Nil returns should be submitted.

Categories of GST Returns

GST returns are categorised in different categories based on the kind of taxpayer. The following are some of the common GST return forms to file nil returns:

GSTR-1: It is the re-importation of external stocks of products and services. Where no sales are made in a period, the return can be made as being Nil.
GSTR-3B: It is the summary return which is to be filed by a taxpayer on a monthly or quarterly basis. It recaps the information about sales, purchases, input tax credit (ITC) and tax paid. Nil return of GSTR-3B means no sales, no input tax credit and no tax payable within a period.
GSTR-4: This is applicable to those taxpayers who have chosen the Composition Scheme under GST. A Nil return in this case also means that there was no business, or no tax liability during the period.
GSTR-6: In the case of the input service distributors. In the event of zero business or input tax credit to be distributed, Nil return should be filed.
GSTR-7: This applies to tax deductors of section 51 of the GST Act. When no TDS is to be deducted, a Nil return will have to be submitted.
GSTR-8: To those who are operators of e-commerce and who gather taxes at the source. In case no tax is charged, they should have Nil returns.

Why is Nil Return Filing Important?

Legal Compliance: GST law requires all taxpayers registered under GST to submit returns even when the taxpayers are not engaged in any business. Failure to file may attract penalties, late fees or they may revoke the GST registration.
Avoid Penalties: There is a risk of penalty or late penalties even where there is no tax liability such as late filing or not filing returns (including Nil returns).
GST Registration Validity: Nil returns are useful in order to maintain the GST registration active. Unless returns are submitted regularly, GST authorities will cancel registration.
Maintains Credibility: Filing even when Nil regularly will enable businesses to keep themselves on a clean track record with the tax authorities ,where they will be seen as adhering to the GST regulations.

Steps for Filing Nil GST Returns

The filing procedure of Nil returns is similar to a filing of a normal GST return with the only major difference that there is no business operations or taxable supplies that have been reported. Here's how to file Nil returns:

Step 1: Log in to the GST Portal

Go to the official GST portal: www.gst.gov.in.
Enter your login credentials (GSTIN and password).

Step 2: Select the Correct Return Form

Choose the appropriate GST return form based on the type of taxpayer and the frequency (monthly/quarterly) of filing.

For example, if you are a regular taxpayer, select GSTR-3B.
If you are under the Composition Scheme, choose GSTR-4.

Step 3: Fill in the Details

GSTR-3B (Nil Return): In the GSTR-3B form, enter "Nil" in the fields that relate to outward supplies, input tax credit, and tax liabilities. There are no details to fill in since no transactions occurred.
GSTR-1 (Nil Return): For GSTR-1, you do not need to provide any details of sales or supplies. Simply submit a Nil return.
GSTR-4 (Nil Return): If you're under the Composition Scheme and have no business activity, file a Nil return by selecting the appropriate option in the form.

Step 4: Submit the Return

Once all the necessary information is filled in (even if it is just Nil), submit the return. After submission, a message confirming the filing will appear.

Step 5: Payment (If Applicable)

For Nil returns, there will be no tax to pay, so no payment is required. However, in case any taxes were applicable, you would need to make the payment at this stage.

Step 6: Acknowledgement

After filing, you will receive an acknowledgment receipt (ARN). This proves that your Nil return has been successfully filed.

Consequences of Not Filing Nil Returns

Penalties and Fines: If a Nil return is not filed, penalties for non-compliance under GST may apply. A fine of ₹50 per day for late filing may be charged (₹25 each for CGST and SGST). This can go up to ₹10,000 or the tax due (whichever is higher).
GST Registration Cancellation: If a business fails to file Nil returns for six months in a row, GST authorities may cancel the GST registration, leading to the business losing its registered status.
Blocked Input Tax Credit (ITC): For businesses that are filing GST returns late, the Input Tax Credit for future transactions may be blocked, creating a financial burden.

Common Mistakes to Avoid When Filing Nil Returns

Not Filing on Time: Even if you have no business activity, the return must be filed within the due date.
Incorrect Form: Ensure you are filing the right GST return form (GSTR-3B, GSTR-4, etc.).
Missing the Acknowledgment: Always ensure that you receive the ARN (Acknowledgment Receipt Number) after filing your return. This proves that your Nil return was successfully submitted.
Failure to Keep Records: Even if you’re filing Nil returns, it's important to maintain business records in case of any future audits or tax inquiries.

Filing Nil Returns under Different Schemes

Regular GST Taxpayer: Regular taxpayers who have no taxable supply must file Nil returns in GSTR-3B.
Composition Scheme Taxpayers: Those under the Composition Scheme need to file Nil returns in GSTR-4.
Input Service Distributor (ISD): ISDs need to file Nil returns under GSTR-6 if no ITC is being distributed.
Tax Deductor (TDS): If no TDS is deducted in a particular month, Nil returns must be filed under GSTR-7.
E-Commerce Operator: If no tax is collected on behalf of sellers, Nil returns must be filed under GSTR-8.

Conclusion

Even where there are no taxable supplies or sales, businesses must file Nil returns under GST. It makes sure that there is compliance with the law, avoidance of penalties and preservation of GST registration. The process and timely met deadlines will enable businesses to evade huddles and be on good terms with tax authorities.

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