December 26, 2022

GST: Late Fee

Goods and service tax is a tax for the majority of products and services sold for domestic consumption. Consumers pay the GST through the GST Return, and businesses that sell the products and services are responsible for remitting it to the government. GST late fee is a sum assessed for filing GST Returns after the deadline, as stated in the GST Legislation. When a GST Registered business misses the deadlines for filing GST Returns, a prescribed late fee will be charged for each day of the delay.

The ITC (Input Tax Credit) available in the computerised credit ledger cannot be used by the taxpayer to pay the late fee; instead, the late fee must be paid in cash. When nil returns are not filed on time, a late fee is also charged. One must still pay a late fee even if there are no sales or transactions and no GST due to report in the GSTR-3B.

GST late fee is determined based on how many days have passed since the due date. Three days after the specified due date of July 20, 2022, the GSTR-3B GST return is due on July 23, 2022. The late fees must be paid in cash and will be assessed for a three-day period.

Annual GST Return:

Are liable to CGST law's late fees of INR 100 per day and SGST law's INR 100 per day. As a result, a total of INR 200 per day is applicable until late costs are paid.  A particular financial year's maximum fine cannot be greater than 0.25 percent of the taxpayer's total revenue.

Nil GST Return:

Must be submitted within the allotted time frame even if the tax authorities do not need payment of the GST return amount. You will be assessed a day late fee if you file your NIL returns after the deadline. The CGST Act levies a daily fee of INR 50, while the SGST Act levies a daily fee of INR 50. Late filing of NIL returns is charged a fine of INR 100 each day up until the date of fee payment.

Non-Annual GST Return:

The CGST Act and the SGST Act both levy late costs and fees of Rs. 100 on the taxpayer if the Non-Annual GST return is not submitted on time. A day of GST late fee of INR 200 is consequently assessed. This fee will accrue daily until the returns are filed and the late fees are paid. No more than INR 5000 can be collected in total. The per day and maximum amounts apply even to interstate shipments of commodities.

If GST is not paid by the due dates for filing a return, interest is due at the following rates:

Excess reduction in output tax: 18% per annum

Tax paid after due date: 24% per annum

The Interest has to be calculated from the next day on which the tax was due.

For example, a taxpayer fails to make a tax payment of Rs. 10,000 for the month of December 2020, where the due date was 20th January 2021. If he makes the payment on 20th February 2021, the interest for the delay period (31 days: from 21st January till 20th February) will be calculated as follows:

Rs.10,000 * 31/365 * 18% = Rs.153

List of GST Late Fee Notification


                                                                                                   ActLate fees for everyday delay                                                                                                                                                                                                                                                    June 2021 onwards for monthly filers and quarter-ended June 2021 onwards for QRMP taxpayersMaximum late fee is reduced. For nil filers, it is fixed at Rs.500 per return. For the rest, it is fixed as per turnover slabs, explained in the above section.                                                                        


                                                                                                   ACTLate fees for everyday delay                                                                                                                                                    For June 2021onwards in case of monthly filers and quarter-ended June 2021 onwards for QRMP taxpayersReduced maximum late fee. It is fixed at Rs. 500 per return for non-filers. The remainder is fixed in accordance with the turnover slabs described in the section above.                                                                        

GSTR-4 (Annual)

                                                                                                   ActLate fees for everyday delay                                                                                                                                                    FY 2021-22 onwardsMaximum late fee that can be charged will be restricted to Rs.500 per return for nil filing and Rs. 2,000 for other than nil filing.                                                                        


                                                                                                   ActLate fees for everyday delay                                                                                                                                                    July 2017 onwardsReduced late fee 5/2018                                                                        


                                                                                                   ActLate fees for everyday delay                                                                                                                                                    Returns for July 2017 onwards filed on or after 7th Mar 2018Full late fees is applicable 13/2018                                                                        


                                                                                                   ActLate fees for everyday delay                                                                                                                                                    July 2017 onwardsReduced late fee No late fees for the delay in filing a Nil return  7/2018                                                                        


                                                                                                   ActLate fees for everyday delay                                                                                                                                                     Central Goods and Services Act, 2017Rs 100*                                                                                                 State Goods and Services Act, 2017 or Union Territory Goods and Services Act, 2017Rs 100*                                                                                                Total late fees to be paid Rs 200*                                                                                                 The law has fixed a maximum late fees of an amount calculated at 0.25% of the Turnover for the financial year.                                                                        

Thus the government has levied interest and late fines to encourage timely tax collection and reporting. The GST Portal automatically accounts for any delay in the GSTR-3B, and no return is submitted until payment is received. Any waivers are returned to the Cash ledger and are available for future use by the taxpayer.
Automatically calculated late fees are included in the GSTR-3B for the next month. On the other hand, interest must be manually calculated and submitted for payment on the GSTR-3B. Late fees and interest must be paid in cash individually for CGST, SGST, and IGST. GST late fees cannot be settled with input tax credits. A challan is needed for both online and offline GST payments.


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