Late Fees and Interest on GST Return

5paisa Research Team Date: 31 May, 2023 04:56 PM IST


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GST Return Late Fees and Interest are charged when a business entity fails to file its GST returns on time. The article thoroughly covers all recent developments regarding GST late fees and interest charges!

What are GST Return Late Fees and Interest?

GST Late Fees and Interest is a payment paid in accordance with the latest GST regulations for filing GST returns after the deadline. Whenever any GST-registered entity misses the deadlines for filing GST returns, they must compensate a statutory late fee for every passing day of the violation. 

The individual won’t be able to take advantage of the Input Tax Credit or ITC offered by the Electronic Credit Ledger for paying the late fees. Instead, they will have to pay the late fee in cash. 

So, the inability to submit Zero returns by the deadline can often be subject to a late fine. Paying a late fine becomes essential in the case of GSTR-3B, even when there aren’t any transactions or sales and no GST requirement to report.

Now that you know what are GST late fees and interest, let’s delve deeper into this subject matter. 

Taxpayer Due Dates

The due date for GST late fee payment varies between taxpayers. Here are the following types of taxpayers and their respective due dates: 

●    Composition: 18th of the Next Quarter or Month
●    Input Service Distributor: 10th of the Subsequent Month
●    TCS Collector: 10th of the Subsequent Month
●    TDS Deductor: 10th of the Subsequent Month
●    Non-Resident: 20th of the Subsequent Month
●    General Citizen: 20th of the Subsequent Month

GST Late Fees Calculation

According to the decisions made at the 43rd GST Council meeting, the highest GST late fees for GSTR-1 and GSTR-3B are lowered to certain amounts, which vary depending on the turnover slab and the return type. 

Any failure to submit GST returns by the due dates (and extension requests, if any) established by the Income Tax division is considered a violation of the GST Act and subject to severe penalties. 

The penalty fee or amount is determined by the number of days that have passed the deadline ever since the filing of the returns, which can be further categorized into the following:

Late Fee for GSTR 3B:

When it comes to NIL returns, GSTR-3B GST late fees payments are INR 20 (INR 10 for SGST and INR 10 for CGST) daily and INR 50 (INR 25 for SGST and INR 25 for CGST)in every other circumstance. The return is said to be NIL when there are no transactions but only acquisitions. 

The maximum late fee on late payment of GST is INR 10,000 for every single return. The following month will be used to collect late fees for GSTR-3B for the previous month. If you didn’t pay the GST late charge waiver for the previous month, you couldn’t file that month’s return.

Late Fee for GSTR 1:

GST late fees for GSTR-1 are INR 200 daily (INR 100 for SGST and INR 100 for CGST). The Indian Government does not accept GSTR-1 late fee payments. Today, no GST late fees calculator considers it. 

Late Fees for GSTR-9 and GSTR-9A:

GSTR-9A and GSTR-9 late fees are only INR 200 daily, with a maximum of 0.50% of the revenue. This 0.5% includes 0.25% for SGST and 0.25% for CGST. 

According to a recently published notification on Central Tacx by the CBIX, there will be a waiver in late fees charges for GSTR-9 filings that are filed beyond the deadline starting in FY 2022-23. GSTR-9’s late payment penalty for FY 2022–23 has been decreased in the following ways: 

●    Individuals must pay Rs. 50 daily for up to 0.04% of their AATO or Annual Aggregate Turnover (AATO) in any union territory or state.

●    Taxpayers with an AATO of Rs. 5 and 20 crores must pay Rs 100 daily in taxes, up to an amount not exceeding 0.04% of the union territory or state turnover.

Furthermore, a maximum late fee of Rs 20,000 must be paid by taxpayers who have not yet submitted their GSTR-9 for the fiscal years (FYs) 2017–18, 2018–19, 2019–20, 2020–21, and 2021–22. This waived late fee applies only if you submit a pending GSTR-9 between 1st April 2023 and 30th June 2023.

Late Fees for GSTR-10:

The GSTR-10 has a daily GST late fee of INR 200 (INR 100 for SGST and INR 100 for CGST). The penalty’s severity has no upper bound. The return cannot be filed without charging late fees.

Interest in Late Payment of GST:

According to the GST Penalty regulations, taxpayers who fail to pay their income tax within the due date will be charged interest at 18% annually. The interest will be charged for each day after the payment deadline.

Penalty on Missing the GST Due Date:

When taxpayers fail to submit returns by the deadlines specified, they are required to pay a GST late fee of:

●    INR 50 every day, which is equal to INR 25 per day in every instance of CGST and SGST (in the event of tax liability) and 
●    INR 20 per day, which is equal to INR 10 per day in every case of SGST and CGST (in the event of Zero tax liability), 
●    Up to a maximum of INR 5000/-out of the stipulated amount.

Interest in Late Payment of GST

Interest on GST late payment is levied after subtracting the ITC (Input Tax Credit) claims. Interest on late payment of GST is due from taxpayers who: 

●    Pays IGST, SGST, or CGST after the deadline, known as a delayed GST payment. 
●    Argues for an excess ITC (Input Tax Credit).
●    Lowers the excess tax obligation.

Suppose they fail to pay GST for submitting returns. In that case, the interest on late payment of GST is charged at the following rates: 

Tax payment after the deadline

The applicable interest rate is 18% per annum

Excessive ITC claimed, or Excess decrease in Output tax

The applicable interest rate is 24% per annum

The interest must be computed starting the day after the due date for the tax. 

Reduction Under The Latest Amendments

As of 31/3/2023, there has been some latest reduction under the latest amendments. From FY 2022-23 forward, CBIC lowered the GST late fees for GSTR-9 filing as follows: 

●    Taxpayers must pay INR 50 daily for up to a maximum of 0.04% of their AATO or Annual Aggregate Turnover in a union territory or a state.
●    Taxpayers with an AATO of between INR 5 and 20 crores must pay INR 100 daily in taxes, up to a maximum of 0.04% of union territory or state turnover.

The highest late fee for unfiled GSTR-9s for the fiscal years 2017–18, 2018–19, 2019–20, 2020–21, and 2021–22 is INR 20,000. This waived late fee becomes applicable only when you submit a pending GSTR-9 between 1st April 2023 and 30th June 2023.

Rules Applicable for GST Payment for Taxpayers

One must make payments for the GST PMT-06 form via a challan that remains valid for only 15 days. A CIN or Challan Identification Number is sent to the taxpayer upon successfully completing the payment. 
One can pay challans under INR 10,000 only physically. It means they must pay it using checks, demand drafts, or cash via recognized institutions. Online payments for GST late fees and interest are only possible when the challan exceeds INR 10,000. 
The taxpayer’s electronic cash ledger gets credited when online transactions for tax, penalties, interest, or GST late fees are made (through RTGS, Credit Card, NEFT, or Internet Banking). Any remaining funds will be applied to any fees, obligations, or unpaid interests.
After 8 PM the following day, online fees will be transferred to the taxpayer’s account. 

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Frequently Asked Questions

The Government levies GST late fees and interest for each day you default on filing the GST returns that should have been filed within the deadline. Additionally, if any taxes are owed, interest will be charged on the tax liability at an interest rate of 18% annually.

If you wish to maintain compliance, you must pay late fees on late payment of GST. What can happen is that you might be asked to pay a lesser fine.

Yes, under GST, filing returns is crucial. Taxpayers must file a NIL return when there isn’t any transaction.

Remember that the Income Tax Department will levy GST late fees when you file your returns after the deadline. According to the SGST and CGST Acts, you will be subject to a penalty of INR 50 and INR 100 every passing day, respectively. An 18% annual late fee interest on GST will apply to the penalized amount. 

Yes, taxpayers with valid GST registration must submit GST returns on the 10th, 15th, or 20th of each month. This still holds true if a month has no business transactions at all. To avoid a fine, the taxpayer should register on the GST website and submit a NIL GST return.

The GST Penalty Regulations state that taxpayers who don’t pay their taxes within the stipulated time will be subject to interest charges at a rate of 18% annually.

Regardless of whether you’re subject to a tax liability or not, if you are a GST-registered taxpayer, you must file the relevant GST returns. You can submit a Nil return if you had no transactions during the month. You can file a GSTR-3B if your transactions are purchases exclusively, not sales.

The GST return for the following period automatically includes the GST late fees. There is no way to avoid paying late fees. The system will not let you continue filing your GST returns until you pay the GST late fees.

For information on late fees for a delayed GSTR-3B filing, see the section above titled “Amount of Late Fees Applicable” or click here.

You run the danger of revoking your GST registration if you haven’t filed your GST returns for six months. Be aware that the Federal Government may shorten the time frame for default.